Twelve years on from the launch of the Make in India campaign on September 25, 2014, a look at 12 metrics spanning growth, investment, employment, and exports shows that the manufacturing sector’s share in India’s economic growth, employment, and global exports has remained largely the same since then.
The data over the last 12 years show that while the government’s incentive schemes are the ones that have met some success, other metrics that reflect a “development and growth-oriented environment” are underperforming.
While recent incentive schemes by the government have seen some success, those gains are limited to a handful of sectors.
While launching the campaign, Prime Minister Narendra Modi said that “industrialists don’t come due to some fancy incentive scheme” but instead need a “development and growth-oriented environment”.
The data over the last 12 years show that while the government’s incentive schemes are the ones that have met some success, other metrics that reflect a “development and growth-oriented environment” are underperforming.
No major boost to growth
The manufacturing sector has grown faster than the overall economy in five of the 12 years under consideration, based on the old series. Under the new series, it has outpaced overall growth in all three years (2023-24 to 2025-26) for which data is available, but that gap is shrinking fast.
The Index of Industrial Production data, which comes out once a month, is more stark. The manufacturing sector within the IIP outpaced the overall index’s growth in only three out of the 12 years, as per the old series of the index. The new series shows the manufacturing sector’s growth was the same as that of the overall index in 2023-24, but was slower in the next two years.
As far as the composition of the economy goes, the older series of Gross Value Added (GVA) data shows the manufacturing sector’s share in overall GVA is lower in 2025-26 than it was when Make in India was launched in 2014. The new series shows that the sector’s share has increased marginally from 14.6% in 2022-23 to 15.6% in 2025-26.
Rising exports, flat share
India saw the value of its non-petroleum goods exports grow 53% to $388.3 billion in 2025-26 from $253.5 billion the year the Make in India campaign was launched. However, the data also shows that non-petroleum goods exports grew more than 400% over the 12 years before this, albeit on a much smaller base.
However, the base effect only accounts for some of this growth disparity. Data from UNCTAD shows India’s share in global merchandise exports grew from around 0.8% in 2002 to 1.7% in 2013, where it remained even in 2025-26.
Tepid investment response
The gross fixed capital formation (GFCF) by the private sector — a measure of its spending on real asset creation — formed a lower share of GDP in 2023-24, the latest year for which the old series has data, than it did in 2014-15. The new series, too, shows that GFCF as a percentage of GDP has been falling since 2022-23.
The growth of FDI to the manufacturing sector has been slower than the growth in overall FDI in seven of the 12 years under consideration. Its share in overall FDI grew from nearly 48% in 2014-15 to 55% in 2025-26.
The RBI’s data on capacity utilisation, a measure of how intensively factories are being used, shows that this metric never has been slowly increasing over the last few years, but is still below the 80% mark that is considered the limit after which companies invest to create new capacity.
The RBI’s data further shows that bank credit to industry has been growing strong over the last few years, especially led by credit to micro, small, and medium enterprises. However, experts have pointed out that, in the absence of sustained rapid growth in output, this suggests that the loans are being taken to provide working capital rather than for fresh investments.
Impact of incentives
The government’s Production-Linked Incentive schemes have yielded some results. Launched across 2020 and 2021, the 14 schemes have resulted in a cumulative investment of Rs 2.4 lakh crore as of March 2026. However, the data also shows that this performance is highly concentrated.
The top five sectors — solar modules, pharmaceutical drugs, automobiles and their components, specialty steel, and large-scale electronics manufacturing — together account for nearly 83% of all the investment under these schemes.
Flat employment effect
The food products, large-scale electronics manufacturing, pharmaceutical drugs, automobiles and their components, and white goods sectors cumulatively accounted for more than 86% of the 8.5 lakh people employed under these schemes.
The government says three sectors — large-scale electronics manufacturing, IT hardware, and solar modules — have resulted in an additional 5.7 lakh of indirect employment.
Data sourced by CMIE from the Ministry of Labour and Employment shows that the total number of people employed in the manufacturing sector grew from 5.1 crore in 2016-17 to 5.3 crore in 2025-26. The manufacturing sector’s share in total employment was largely the same in 2025-26 as in a decade earlier.
Published – September 25, 2026 06:24 am IST
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