India’s Manufacturing Sector Witnesses New Reforms - News

India’s manufacturing sector, which contributes 17 percent to the country’s GDP, has risen to become the sixth-largest manufacturing economy globally. Despite its substantial contribution, India commands just 3.1 percent of the global GDP, signaling significant room for growth.

Recent reforms and strategic initiatives have set the stage for a new era of expansion. Key reforms, including the Make in India initiative, Unified Payments Interface (UPI), and the Production Linked Incentives (PLI) scheme, have strengthened the sector. These changes have improved balance sheets, increased capital availability, and reduced receivable days, creating robust investment opportunities.

Infrastructure projects and thriving sectors like defence, electronics manufacturing, electric vehicles (EVs), and data centers are driving this growth. Over 400 corporates and 600 unlisted entities across more than 35 industries are fueling a new capex supercycle, contrasting with previous cycles driven by fewer entities.

In the defence sector, the country’s self-reliance is supported by the Make in India initiative and increased Foreign Direct Investment (FDI). The government has established defence corridors and released indigenization lists to promote domestic production and reduce imports. This drive is supported by Defence Public Sector Undertakings (DPSUs) and initiatives like iDEX and Self-Reliant Initiatives through Joint Action (SRIJAN), which encourage local manufacturing and technological innovation.