As India approaches a pivotal moment in its manufacturing journey, the landscape is poised for transformative change.
Recent developments in key sectors such as electronics, semiconductors, batteries, and rare earths signal a potential
renaissance that could elevate India's position in the global supply chain. The question that looms large is not merely
whether India can replicate China's manufacturing boom, but rather how it will carve out its unique path towards
sustainable industrial growth.
At the heart of this shift is the global imperative to diversify supply chains away from China. Companies worldwide are
re-evaluating their production strategies, and India stands at the forefront of this transition. With the Indian
government actively pursuing trade agreements and policy frameworks aimed at bolstering manufacturing, the potential for
a robust industrial base is becoming increasingly tangible. The rapid expansion of Apple’s manufacturing capabilities in
India serves as a powerful indicator, showcasing not only the country’s rise as a secondary production base but also its
growing attractiveness to global suppliers.
The electronics sector, particularly the localisation of components, is pivotal in determining whether India can move
beyond mere assembly to deeper value addition. The introduction of the Production-Linked Incentive (PLI) scheme has
already begun to yield results, but the true test will be in 2026. If India can successfully cultivate a domestic
ecosystem for critical components—such as printed circuit boards and camera modules—manufacturing could emerge as a
significant contributor to economic growth, akin to China’s early consumer electronics sector.
However, this evolution is not without its challenges. The semiconductor industry represents both an ambitious goal and
a daunting task for India. While the establishment of fabrication and packaging facilities is a strategic move towards
self-sufficiency, the reality is that chip production involves immense capital investment and a highly competitive
global landscape. The success of India’s semiconductor push will depend not just on individual facilities but on the
formation of a comprehensive ecosystem that integrates talent, technology, and supply chains. The potential for
collaboration among chip designers, material suppliers, and electronics manufacturers will be crucial in fostering a
credible semiconductor industry.
Battery manufacturing and rare-earth processing are arguably the more transformative elements of India’s industrial
strategy. As global demand for energy storage solutions surges, India’s domestic market presents a significant
opportunity. In 2026, if India can transition from initial pilot projects to commercially viable operations in these
sectors, it may well lay the foundation for a new industrial core. This move would not only reduce dependence on foreign
suppliers but also anchor advanced manufacturing capabilities within the country.
The implications of this industrial strategy extend beyond mere economic metrics. India’s workforce, characterized by
its youthful demographic, presents both an opportunity and a challenge. The country’s labour market dynamics differ
fundamentally from those of China, with varying skill levels and rigidities in formal employment. For the manufacturing
sector to flourish, there will need to be a concerted effort to align vocational training with industry needs. The
effectiveness of recent policy initiatives, such as the apprenticeship scheme, will be critical in determining whether
India can absorb large numbers of workers into its factories, moving beyond reliance on contract labour.
In this context, the geopolitical landscape plays a significant role in shaping India’s manufacturing narrative. The
ongoing trade tensions among major global powers and the search for stable production bases create a unique opportunity
for India. However, this window of opportunity is not permanent; other countries are actively vying for the same
investments. India’s advantages, including its scale and political stability, must be leveraged effectively to attract
and retain foreign investment in its manufacturing sectors.
Ultimately, India's path towards a manufacturing renaissance will not mirror the rapid ascent of China. Instead, 2026
may mark the beginning of a more measured but resilient growth trajectory. The convergence of electronics,
semiconductors, batteries, and rare earths into a coherent industrial strategy, coupled with favorable domestic demand
and a shifting global supply chain, could yield a sustainable manufacturing ecosystem. This evolution has the potential
to foster a new era of economic growth, characterized by increased employment opportunities and a diversification of
As this narrative unfolds, India’s manufacturing sector will be closely watched by investors and policymakers alike. The
sentiment within the markets will likely reflect the progress made in these sectors, influencing liquidity and
volatility as the country strives to establish itself as a manufacturing powerhouse in an increasingly competitive