New Delhi, January 24, 2026
Amid growing global trade uncertainty and high tariff pressures, the Indian government is preparing a major strategic shift in industrial policy, aiming to triple the country’s exports by 2035 through a targeted expansion of domestic manufacturing rather than heavy public spending.
According to senior government officials, the plan focuses on strengthening manufacturing capacity in 15 priority sectors, marking the third major push under Prime Minister Narendra Modi to raise manufacturing’s contribution to India’s economy.
🏭 Focus on 15 Strategic Manufacturing Sectors
Under the new approach, India will prioritize manufacturing in sectors ranging from high-end semiconductors and advanced metals to labor-intensive industries such as leather manufacturing. The objective is to accelerate economic growth and raise annual merchandise exports to approximately $1.3 trillion by 2035.
Officials said the strategy is designed to improve India’s competitiveness at a time when global supply chains are under strain due to rising tariffs and geopolitical uncertainty.
🔄 Third Attempt to Raise Manufacturing Share
The Modi government has previously attempted to increase manufacturing’s share of GDP to 25%, but those efforts fell short:
In 2014, through the Make in India initiative
In 2020, via a $23 billion production-linked incentive (PLI) package
Despite multiple policy measures, manufacturing growth remained slower than expected. A policymaker involved in the current plan said a bold, focused, and unified strategy is now required to drive meaningful change.
🧾 Cutting Red Tape, Speeding Approvals
A central pillar of the new plan is reducing bureaucratic hurdles. The government has set up a high-level panel, chaired by a cabinet minister and including the Cabinet Secretary and senior bureaucrats, to fast-track:
Regulatory approvals for large projects
Land acquisition
Access to affordable financing
Manufacturing hubs are being identified based on existing infrastructure, geographic advantages, and proximity to ports, enabling faster logistics and export movement.
The panel will also coordinate with state governments to ensure low-cost power supply for these hubs, a key requirement for globally competitive manufacturing.
🏗️ ₹100 Billion Investment in Manufacturing Hubs
Officials said the government plans to invest around ₹100 billion ($1.2 billion) in infrastructure for nearly 30 manufacturing hubs across the targeted sectors.
In addition, the government will provide $218 million in grants for advanced areas such as:
Semiconductor fabrication
Energy storage technologies
These incentives are aimed at attracting private investment and building long-term industrial capabilities.
📊 Strategic Shift Over Heavy Spending
Unlike previous approaches, the current strategy emphasizes policy coordination, infrastructure readiness, and regulatory efficiency over large-scale fiscal outlays. Officials believe this shift will help India integrate more deeply into global value chains and shield exports from tariff-related disruptions.
If executed effectively, the plan could mark a turning point for India’s manufacturing ambitions and significantly reshape the country’s export landscape over the next decade.
