Make In India: Hits, Misses And Reality

You are holding a brand new iPhone 16 Pro Max. Now, imagine this iPhone is manufactured in Tamil Nadu at Sriperumbudur and not imported from China?

And visualize you are driving a Tata Nexon EV assembled completely in Pune. Or using a Samsung Galaxy smartphone manufactured in Noida. Once upon a time, all these products were imported from China and South Korea; they are now proudly carrying the “Made in India” tag.

Relax! You are not seeing any dream, nor am I sounding over-excited. This has now become a reality. India is on a transformational journey from an import-dependent consumer economy to a leading industrial economy.

But here is a key question: Are we on the path towards real transformation or impressive headlines that lack reality?

Vision of Make in India

On September 25, 2014, Honorable Prime Minister Narendra Modi launched the ‘Make in India’ scheme. It was introduced with four objectives to mark the rebirth of India’s manufacturing potential. Let’s understand each point with an example:

● To increase and promote manufacturing capabilities for domestic goods. For instance, the launch of INS Vikrant, India’s first domestically built aircraft carrier, marked a significant milestone in defence manufacturing.

● To reduce the country’s dependency on heavy imports. For example, the Semicon India Program has a Rs.76,000 crore budget. It aims to establish sustainable semiconductor manufacturing to reduce import dependency.

● To reduce the unemployment rate and increase employment opportunities. The Startup India Initiative can be the best example to illustrate this point. It led to the establishment of over 148,931 startups, generating 15.5 lakh direct jobs.

● To attract substantial global investment and strengthen India’s industrial ecosystem. India has received significant foreign investments, like Micron’s Rs. 22,000 crore. This is for investment in semiconductor manufacturing under the Semicon India program.

Beyond the numbers, the initiative had a perception goal: to convince the world that India is not just a source of raw resources but a place where world-class products can be imagined, designed, and built.

Progress Highlights

The Smartphone Reforms

A massive transformation was observed in the electronics market when Apple officially began the production of the iPhone 16 Pro Max. This is the confidence of the company in India to produce its flagship Pro models outside China. Because India is cost-effective in every aspect. Foxconn’s facility in Sriperumbudur, Tamil Nadu, has become Apple’s strategic manufacturing base. India produces these premium devices for both domestic consumption and global export.

While Samsung has also made India a key manufacturing base, it has built the world’s largest mobile phone manufacturing facility in Noida, significantly boosting its production capacity. Now, more phones are manufactured in this single Indian facility than Samsung produces in South Korea and Vietnam combined.

Several other major brands, such as Xiaomi, Oppo, Vivo, and OnePlus, have developed large-scale manufacturing operations in India. These companies have established their plants in states such as Tamil Nadu, Uttar Pradesh, and Andhra Pradesh.

The impact of this manufacturing expansion is reflected in India’s export performance. India’s electronics exports crossed US$47 billion in 2025, up about 37% in a year, and smartphones led the charge. iPhone exports alone hit a record near ₹2 trillion in FY26, making the iPhone India’s single largest branded export. Over five years, Apple has shipped roughly US$50 billion of iPhones made in India, much of it now headed to the United States rather than sold at home.

Let’s look into some other areas where India is heading towards manufacturing its own products.

Silicon Dreams Becoming Reality

India has now moved from ambition to execution. In February 2026, Prime Minister Modi inaugurated Micron’s assembly-and-test facility in Sanand, Gujarat, while Kaynes Semicon’s unit entered commercial production the following month. The bigger milestone is still ahead: Tata Electronics, in partnership with Taiwan’s PSMC, is targeting the first chips from its Dholera fabrication plant by the end of 2026.

This marks India’s entry into one of the world’s most strategically important and technologically advanced industries. The Government of India has also given support by approving Rs.1.52 lakh crore in semiconductor total investments. This level of investment reflects the government’s view of semiconductors as a strategic national resource. The goal is to achieve technological independence and supply chain security in a dynamic digital world.

Incentives Driving Manufacturing Boom

Production Linked Incentive (PLI) program has become the key player behind India’s manufacturing comeback. This program had received a budget of Rs.1.97 Lakh Crore covering 14 critical sectors to boost the manufacturing capabilities and increase exports of the country.

The impact has compounded since. By September 2025, actual investments under the scheme had crossed Rs.2 lakh crore, incremental production and sales had exceeded Rs.18.7 lakh crore, and around 806 applications had been approved across sectors. This generates an estimated 12.6 lakh jobs, with roughly Rs.23,946 crore disbursed in incentives so far.

Moreover, the purpose of this scheme was to attract investments in key sectors to encourage the adoption of cutting-edge technology. Secondly, to build economies of scale in manufacturing and turn Indian enterprises into globally competitive players.

The SPECS (Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors) program works with PLI by offering 25% capital expenditure incentives. The objective is to make India an attractive alternative to traditional manufacturing hubs for global electronics companies seeking supply chain diversification.

Nevertheless, the PLI scheme has not been without friction.

The United States raised specific concerns about specialty steel under PLI at the WTO. The US also stated that subsidizing production amid global overcapacity in steel violates fair trade principles and may disrupt the global market.
The Tesla episode is more revealing still:

After years of disagreement over India’s import duties, Tesla entered the Indian market in mid-2025 but chose a retail-led strategy rather than local manufacturing.
The company opened showrooms in Mumbai, Delhi, Gurugram, and Bengaluru and began selling Model Y vehicles imported from its Shanghai plant. Hyderabad emerged as its fifth Indian location in 2026.
High import duties of up to 100% on completely built units kept Tesla’s vehicles beyond the reach of most buyers, resulting in only a few hundred units being sold in 2025.
To attract global automakers, India reduced import duties to 15% for companies committing at least US$500 million in local manufacturing investment.
Despite these incentives, Tesla declined to establish production facilities in India, highlighting the limits of incentive-led industrial policy in securing manufacturing investment.

From Import Dependency to Domestic Strength

India has also emerged as a significant player in the global toy manufacturing market. You are buying a toy for your toddler and see a tag ‘Made in India’. This reflects the actual transformation. Yes, India now produces 400 million toys annually.

Several sectors include:

Automotive Manufacturing:

● Tata Motors, now valued at USD 42 billion, represents India’s automotive manufacturing capabilities. Tata has manufacturing plants in several cities, which represent India’s ability to produce world-class vehicles.

● Moreover, Hyundai’s manufacturing plant in Chennai can produce up to 824,000 units vehicles annually, supporting both domestic sales and exports. Models like Creta, Grandi10, and several others are being manufactured in Tamil Nadu to compete globally with vehicles produced in traditional automotive manufacturing centers.

Food & Beverages:

India’s food processing sector shows manufacturing capabilities across diverse categories.

● With dairy products competing with the international brands, Amul is valued at $4.1 billion. It has earned recognition as India’s top food brand for 2025, with manufacturing facilities across 17 states of India.

● Leading food company, Britannia, has manufacturing centers across 12 states in India. This illustrates how Indian food manufacturing has evolved. Britannia exports to 80 countries across the globe, with foreign exchange earnings approx. Rs.374.13 Crores.

Pharmaceutical:

India manufactures 60% of the world’s vaccines and supplies generic medicines to over 200 countries. India is the “pharmacy of the world” with companies such as Dr Reddy’s and Cipla running world-class manufacturing plants that meet high standards of international regulation.

FDI & Manufacturing Growth

An increase in the confidence of foreign investors in India’s manufacturing potential has translated into stronger foreign direct investment inflows. FDI in the manufacturing sector grew by 18% in FY 2024–25, reaching USD 19.04 billion compared to USD 16.12 billion in FY 2023–24. This growth reflects India’s increasing attractiveness as a destination for multinational corporations seeking export-oriented production platforms for both national and international markets.

But still, there is high competition with China and Vietnam:

● During FY 2022, China registered USD189 billion in FDI.

● Vietnam has developed a strong niche in electronics. South Korea’s Samsung has invested USD 1.8 billion to produce OLED displays for automobiles and technology equipment.

Despite attracting growing foreign investments, India has struggled to translate these inflows into a substantially larger manufacturing footprint within the domestic economy. The Make in India initiative set an ambitious goal of increasing manufacturing’s contribution to India’s GDP to 25% by 2025. However, manufacturing accounted for only about 12.61% of GDP in 2024, indicating that the objective remained unmet.

Recognizing the challenges involved in achieving this benchmark, the government launched the National Manufacturing Mission, effectively extending the timeline for reaching a 25% manufacturing share of GDP to 2035.

Several structural challenges continue to constrain the growth of India’s manufacturing sector and limit progress toward the government’s long-term manufacturing objectives, including:

● Weak demand and systemic issues.

● Reduced capital formation and investment.

● Infrastructure, logistics, and high input costs.

● Complex regulatory and labor environment.

Although the manufacturing target remains unmet, the Make in India initiative has strengthened India’s industrial ecosystem, attracted substantial foreign investment, and laid the foundation for future manufacturing growth. Whether these gains ultimately translate into a significantly larger manufacturing share of GDP will depend on how effectively structural challenges are addressed in the coming years.

Reforms in Infrastructure & Business Ecosystem

Another initiative called the PM Gati Shakti initiative has provided a smooth and seamless convenience by developing an interconnected multi-modal connectivity. The aim of this scheme is to help industrial clusters connect more efficiently with ports, markets, and supply networks. Under this scheme, the manufacturing superhighways have been created in the form of industrial corridors between Delhi-Mumbai, Chennai-Bengaluru, and Amritsar-Kolkata, which have helped different industries.

Regulatory reforms are also transformative:

● Simple labor laws will help businesses expand more efficiently and fast.

● Increased protection of intellectual property promotes innovation and the transfer of technology.

● Single-window clearance has reduced bureaucracy; hence, it has become easy to establish and run manufacturing plants.

Challenges Ahead

There are still fundamental issues that require attention. These issues are limiting India’s manufacturing potential, despite the remarkable developments like PLI success and FDI inflows. Rapid manufacturing expansion creates demand for skilled workers. The education and training systems struggle to meet this requirement. So, there is an increase in skill gaps.

Although research and development capabilities are enhancing, they are still far behind the global manufacturing leaders. Hence, this restricts India from moving up the value chain in manufacturing sectors. Innovation ecosystems require deeper development to support advanced manufacturing technologies.

Legal hurdles such as obtaining power connections, approvals for land & water, and labor law compliance. Though they are reduced at the central level, they continue to create challenges at some state and local levels.

Furthermore, regulatory coordination between different government levels sometimes creates implementation delays. Reasons can be multiple, such as oversight, contradictory rules, communication gaps, and split accountability.

Another challenge lies in strengthening domestic supply chains for semiconductors and electronic components, which will require continued investment and policy support.

The Road to True Self-Reliance

To become truly self-reliant, investment in technology innovation, research and development must increase. India should maximize the involvement of Micro, Small, and Medium Enterprises (MSMEs) in global supply chains. This can be done through schemes like RAMP, MDA, EPCG, etc. The growth in manufacturing needs to have a positive impact on the distribution of economic benefits.

Green manufacturing and sustainability have also become the main stage in future growth. The trend of manufacturing growth in India should align with environmental obligations. This includes reducing greenhouse gas, air and water pollution. Further, we should also increase the use of recyclable and renewable materials. This is due to the international market being increasingly shifting towards eco-friendly manufacturing.

Additionally, Indian competitiveness in the next stage of manufacturing development will be determined by adopting Industry 4.0 principles. Along with that, artificial intelligence and digital devices should be given equal importance.

Finally, Fiscal incentives based on performance metrics will maintain momentum. At the same time, it is crucial to ensure that any support can be translated into economic outcome measures. It has to be more of quality manufacturing and technology enhancement rather than the number of manufacturing units.

A Manufacturing Revolution in Motion

The shift from importing basic electronics to producing smartphones represents India’s most significant economic transition in modern history. These are not just industrial achievements when Apple produces iPhone 16 Pro Max units in Sriperumbudur, and when Tata prepares to produce India’s first indigenous semiconductor chips; they define fundamental changes in global manufacturing dynamics.

This evidence shows that “Make in India” has moved beyond ‘reducing the imports’ to a complete rethinking of India in the world economy. Over the past decade, it has contributed to a gradual shift in how India participates in global manufacturing, from a major consumer market to an export-oriented production base.

Although several targets remain unmet, the foundations for future growth have been established. The next phase will determine whether India can translate its manufacturing scale into greater technological capability, innovation, and global competitiveness.

As India is on the threshold of becoming a global manufacturing leader, one key question arises: Will it shape the future by setting world benchmarks in areas such as innovation and sustainability? Or continue to follow in the footsteps of other manufacturing economies?

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What is the Make in India initiative?

Launched on 25 September 2014, Make in India is a government initiative to turn India into a global manufacturing and design hub by boosting domestic production, cutting import dependence, attracting investment, and creating jobs across sectors from electronics to defence.

Has Make in India been successful?

Partly. The initiative has delivered significant gains in electronics, smartphones, semiconductors, and foreign investment. However, manufacturing accounted for only about 12.6% of GDP in 2024, well below the original goal of reaching 25% by 2025.

What is the PLI scheme?

The Production Linked Incentive (PLI) scheme provides financial incentives linked to incremental production and sales across 14 sectors. With an outlay of Rs.1.97 lakh crore, it has attracted over Rs.2 lakh crore in investment and supported an estimated 12.6 lakh jobs.

Why did Make in India miss its 25% manufacturing target?

A combination of weak demand, slower private investment, infrastructure and logistics costs, skill shortages, and regulatory challenges limited progress. In response, the government launched the National Manufacturing Mission to accelerate manufacturing growth over the next decade.

What is the National Manufacturing Mission?

Announced in the 2025-26 Union Budget, the National Manufacturing Mission is the next phase of India’s manufacturing strategy. It focuses on improving competitiveness, technology adoption, workforce readiness, MSME growth, and clean-tech manufacturing, while aiming to raise manufacturing’s share of GDP to 25% by 2035.

References:

Last updated: June 2026 | This article is for general informational and educational purposes only and does not constitute financial, investment, or policy advice. Figures are drawn from public and government sources and are current as of writing; economic data is periodically revised, so verify the latest numbers before relying on them. Company and brand names are cited as illustrative examples and do not imply any affiliation or endorsement.

Sundhara

Written by Sundhara, a finance and business content writer with 9+ years in banking. As a Credit Officer at Bank of Baroda she assessed corporate and retail credit risk, and as a Wealth Relationship Manager at ICICI Bank she managed HNI and UHNI portfolios. With an MBA in Finance, she writes research-backed, compliance-aware content across finance and fintech, business and brand. Her work pairs real industry experience with editorial precision.

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