VARIOUS SECTORS OF MANUFACTURING INDUSTRY
Steel Sector
• One of the primary forces behind industrialization has been the use of metals. Steel has traditionally occupied a top spot among metals. Steel production and consumption are frequently seen as measures of a country’s economic development because it is both a raw material and an intermediary product. Therefore, it would not be an exaggeration to argue that the steel sector has always been at the forefront of industrial progress and that it is
the foundation of any economy. The Indian steel industry is classified into three categories - major producers, main producers and secondary producers.
India is the world’s second-largest producer of crude steel, it has increased to 7.9% in a duration of 2014-2024. It was recorded with 5.2% in 2014.
Production of 168.4 MT crude steel in 2025-26 and 152.2 in 2024-25
Government supported via provision of 100% FDI under automatic route. This resulted in attracting ₹1,60,000 crore (USD 18.67 billion) between April 2000 and June 2025 by metallurgical industries.
The growth in the Indian steel sector has been driven by the domestic availability of raw materials such as iron ore and cost-effective labour. Consequently, the steel sector has been a major contributor to India’s manufacturing output.
The Indian steel industry is modern, with state-of-the- art steel mills. It has always strived for continuous modernisation of older plants and up-gradation to higher energy efficiency levels.
Investments
The steel industry and its associated mining and metallurgy sectors have seen major investments and developments in the recent past.
According to the data released by the Department for Promotion of Industry and Internal Trade (DPIIT), between April 2000-December 2022, Indian metallurgical industries attracted FDI inflows of US$ 17.22 billion.
In FY22, demand for steel was expected to increase by 17% to 110 million tonnes, driven by rising construction activities.
Market Size
Government Initiatives
Some of the other recent Government initiatives in this sector are as follows:
• In July 2021, the Union Cabinet approved the Production- Linked Incentive (PLI) scheme for specialty steel.
• In 2020, ‘Mission Purvodaya’ was launched to accelerate the development of the eastern states of India (Odisha, Jharkhand, Chhattisgarh, West Bengal and the northern part of Andhra Pradesh) through the establishment of an integrated steel hub in Kolkata, West Bengal.
• The Union Cabinet, Government of India approved the National Steel Policy (NSP) 2017, as it intends to create a globally competitive steel industry in India. NSP 2017 envisage 300 million tonnes (MT) steel-making capacity and 160 kgs per capita steel consumption by 2030-31.
• The Ministry of Steel is facilitating the setting up of an industry driven Steel Research and Technology Mission of India (SRTMI) in association with the public and private sector steel companies to spearhead research and development activities in the iron and steel industry at an initial corpus of Rs. 200 crore (US$ 30 million).
Pharmaceuticals Sector
• India is the largest provider of generic drugs globally and is known for its affordable vaccines and generic medications.
• The Indian pharmaceutical industry ranks 3rd globally by volume and 11th by value, with more than 3,000 companies and 10,500 manufacturing units.
• FY25, the sector’s annual turnover reached Rs. 4.72 lakh crore, with exports growing at a CAGR of 7% over the last decade (FY15 to FY25). Generic drugs, over-the-counter medications, bulk drugs, vaccines, contract research & manufacturing, biosimilars, and biologics are some of the major segments of the Indian pharma industry.
• India has the greatest number of pharmaceutical manufacturing facilities that are in compliance with the US Food and Drug Administration (USFDA) and has 500
API producers that make for around 8% of the worldwide API market.
Indian pharmaceutical sector supplies over 50% of global demand for various vaccines, 40% of generic demand in the US and 25% of all medicine in the UK.
The domestic pharmaceutical industry includes a network of 3,000 drug companies and ~10,500 manufacturing units. India enjoys an important position in the global pharmaceuticals sector.
The country also has a large pool of scientists and engineers with a potential to steer the industry ahead to greater heights.
Presently, over 80% of the antiretroviral drugs used globally to combat AIDS (Acquired Immune Deficiency Syndrome) are supplied by Indian pharmaceutical firms. India is rightfully known as the “Pharmacy of the World” due to the low cost and high quality of its medicines.
According to a recent EY FICCI report, as there has been a growing consensus over providing new innovative therapies to patients, Indian pharmaceutical market is estimated to touch US$ 130 billion in value by the end of 2030. Meanwhile, the global market size of pharmaceutical products is estimated to cross over the US$ 1 trillion mark in 2023.
Market Size
EXPORTS
• Pharmaceutical is one of the top ten attractive sectors for foreign investment in India. The pharmaceutical exports from India reach more than 200 nations around the world, including highly regulated markets of the USA, West Europe, Japan, and Australia. India supplied around 45 tonnes and 400 million tablets of hydroxychloroquine to around 114 countries globally.
• India’s drugs and pharmaceuticals exports stood at (US$ 30.5 billion) for FY25 from (US$ 25.3 billion) for FY23, as per the data by Pharmexcil
• Export momentum has also remained strong every month, with Drugs and Pharmaceuticals exports rising by approximately
2.70 per cent from USD 2.59 billion in January 2025 to USD 2.66 billion in January 2026. Further, medical device exports have grown significantly from USD 2.5 billion in 2020-21 to USD 4.1 billion in 2024-25, with exports to 187 countries in FY25.
• Indian drugs are exported to more than 191 countries in the world, with US being the key market. Generic drugs account for 20% of the global export in terms of volume, making the country the largest provider of generic medicines globally.
Government Initiatives
Some of the initiatives taken by the Government to promote the pharmaceutical sector in India are as follows
• As per the Union Budget 2023-24
• A mission to eliminate sickle cell anemia by 2047 will be launched. It would involve raising awareness, conducting a comprehensive screening of seven crore individuals in the impacted tribal regions between the ages of 0 and 40, and providing counselling through coordinated efforts.
• For innovation in the pharmaceutical sector, through centres of excellence, a new initiative to encourage pharmaceutical research and innovation will be implemented. The government persuades business to spend money on R&D in a few chosen priority fields. At the grassroots level, government has also announced on building 157 nursing colleges in co- location with government medical colleges.
• The Union Cabinet, on April 26, 2023, approved the National Medical Devices Policy, 2023. The National Medical Devices Policy, 2023 is expected to facilitate an orderly growth of the medical device sector to meet the public health objectives of access, affordability, quality and innovation.
Ayushman Bharat Digital Mission (ABDM)
• Under the ABDM, citizens will be able to create their ABHA (Ayushman Bharat Health Account) numbers, to which their digital health records can be linked. This will enable creation of longitudinal health records for individuals across various healthcare providers and improve clinical decision making by healthcare providers.
• The trial of ABDM is completed in the six Union Territories of Ladakh, Chandigarh, Dadra & Nagar Haveli and Daman & Diu, Puducherry, Andaman and Nicobar Islands and Lakshadweep with successful demonstration of technology platform developed by the NHA.
Scheme for Development of Pharma industry –
Umbrella Scheme
The Department of Pharmaceuticals has prepared an Umbrella Scheme namely ‘Scheme for Development of Pharma industry’. Which comprises of the following sub schemes
Assistance to Bulk Drug Industry for Common Facilitation Centres
Assistance to Medical Device Industry for Common Facilitation Centres
Assistance to Pharmaceutical Industry (CDP-PS)
Pharmaceutical Promotion and Development Scheme (PPDS)
Pharmaceutical Technology Upgradation Assistance Scheme (PTUAS).
TEXTILE SECTOR
• India’s textiles sector is one of the oldest industries in the Indian economy, dating back to several centuries. The industry is extremely varied, with hand-spun and hand-woven textiles sectors at one end of the spectrum, with the capital-intensive sophisticated mills sector at the other end. The fundamental strength of the textile industry in India is its strong production base of a wide range of fibre/yarns from natural fibres like cotton, jute, silk and wool, to synthetic/man-made fibres like polyester, viscose, nylon and acrylic.
• In order to attract private equity and employee more people, the government introduced various schemes such as the Scheme for Integrated Textile Parks (SITP), Technology Upgradation Fund Scheme (TUFS) and Mega Integrated Textile Region and Apparel (MITRA) Park scheme.
Market Size
Government Initiatives
The Indian government has come up with several export promotion policies for the textiles sector. It has also allowed 100% FDI in the sector under the automatic route.
Other initiatives taken by the Government of India are
In February 2023, the union government approved 1,000 acres for setting up a textile park in Lucknow.
The establishment of 7 (seven) PM Mega Integrated Textile Region and Apparel (PM MITRA) Parks with a total investment of US$ 541.82 million (Rs. 4,445 crore) for the years up to 2027–28 was approved by the government.
In June 2022, the Kerala government announced that it would provide free training to 1,975 candidates under the SAMARTH scheme of the textile industry.
• The Sustainable Textiles for Sustainable Development (SusTex) project by the United Nations Climate Change entity enhances the employment and working circumstances of textile artisans while promoting the sustainable production and use of environmentally friendly textiles.
• The Ministry of Textiles has also been implementing the Handloom Marketing Assistance (HMA), a component of National Handloom Development Programme (NHDP) all across India. HMA provides a marketing platform to the handloom weavers/agencies to sell their products directly to the consumers and develop and promote the marketing channel through organizing expos/events in domestic as well as export markets.
National Technical Textiles Mission
Textile materials that are manufactured for their technical performances and functional properties rather than aesthetic and decorative features fall under the technical textiles category. These products are broadly classified into 12 different categories- Agrotech, Oekotech, Buildtech, Meditech, Geotech, Clothtech, Mobiltech, Hometech, Sportstech, Indutech, Protech, Packtech. To position India as a global leader in Technical Textiles, the Ministry of Textiles launched this scheme.
With a view to position the country as a global leader in Technical Textiles, National Technical Textiles Mission (NTTM) has been approved with a four-year implementation period from FY 2020-21 to 2023-24.
The Mission will have four components
• Component-I (Research, Innovation and Development)
- The fundamental research activities will be based on ‘pooled resource’ method and will be conducted in various Centre for Scientific & Industrial Research (CSIR) laboratories, Indian Institute of Technology (IIT) and other scientific/ industrial/ academic laboratories of repute.
Jute Textile Industry
Component –II (Promotion and Market Development)
- The penetration level of technical textiles is low in India. The Mission will aim at increasing average growth rate through market development, market promotion, international technical collaborations, investment promotions and ‘Make in India’ initiatives.
Component – III (Export Promotion) - The component aims at export promotion of technical textiles. An Export Promotion Council for Technical Textiles will be set up for effective coordination and promotion activities in the segment
Component- IV (Education, Training, Skill Development) - Education, skill development and adequacy of human resources in the country is not adequate to meet the technologically hallenging and fast-growing technical textiles segment. The Mission will promote technical education at higher engineering and technology levels related to technical textiles and its application areas covering engineering, medical, agriculture, aquaculture, and dairy segments.
• Factors Responsible for the Concentration of Jute Industry in the Hooghly Basin
• Proximity of Jute-Producing Areas to the Hooghly Basin.
• Inexpensive Water Transport Provided by the Hooghly River.
• Well-Connected Network of Railways, Waterways, and Roadways for Raw Material Transportation.
•
Abundant Water Resources for Processing Raw Jute.
• Availability of Affordable Labor from West Bengal and Adjoining States.
• Access to Banking, Insurance, and Port Facilities in Kolkata for Exporting Jute Goods.
Government Initiatives for Jute Industry
Minimum Support Price (MSP) for Raw Jute and Mesta: The government sets MSP for raw jute and mesta every
year to protect the interests of jute farmers. The MSP aims to encourage the production of higher-grade jute and motivate farmers to produce better-quality raw jute.
National Jute Board (NJB): The National Jute Board, established under the National Jute Board Act, 2008, has been working since April 1, 2010, to develop an integrated approach to jute cultivation. NJB’s objectives include increasing jute yield, improving the quality of raw jute, promoting better marketing practices, and standardizing raw jute and jute products.
Jute Corporation of India (JCI) Ltd: JCI, a government enterprise founded in 1971, plays a crucial role in implementing the MSP policy for jute producers. It serves as a stabilizing agency in the raw jute market, ensuring fair prices for jute farmers.
Jute Packaging Material (Compulsory Use in Packaging Commodities) Act, 1987: This act mandates the use of jute packaging material in the supply and distribution of certain commodities to promote raw jute and jute packaging material production. This initiative supports jute producers and those involved in the industry.
Jute Technology Mission: This initiative is a key component of the National Jute Policy and supports
various programs in the jute sector. It aims to improve jute cultivation and retting processes. Additionally, it provides assistance to small and marginal jute growers, focusing on enhancing yield and fiber quality.
Challenges for Jute Industry
• World Market Rivalry: The Indian jute industry confronts intense competition from countries like Bangladesh, Thailand, Brazil, Egypt, and others, which offer jute products at very competitive prices.
• Competition from Substitutes: Jute products face formidable competition from substitutes, primarily synthetic fibers. The usage of hemp and plastic bags, for example, has adversely impacted India’s jute industry.
• Outdated Machinery: Much of the jute industry in India relies on outdated machinery. This not only leads to high production costs but also hampers overall productivity in the sector
• Fluctuations in Jute Cultivation Due to Rainfall, Prices, and Competition from Other Crops.
• Dependance on Imported Jute and Mesta Yarn
• Challenges in Maintaining the Competitiveness of Indian Jute Products.
Cotton Textile Industry
Cotton is a unique raw material that doesn’t lose weight during manufacturing, allowing other factors such as power supply, labor, capital, and market demand to determine the industry’s location. Currently, there is a trend to position the industry near markets as market demand dictates the type of cloth to be produced, and finished product demand is highly variable.
Cotton Textile Manufacturing Regions of the World:
Major textile manufacturing regions include India, China, Bangladesh, Pakistan, the United States, and various African countries, with India being one of the prominent players in this sector.
Cotton Textile Industry in India: The cotton textile industry in India has a significant presence, with a substantial increase in cotton production over the years. Cotton production in India surged from 119 lakh bales in 1991-92 to 345 lakh
bales in 2016-17, marking a remarkable growth of 190%. This substantial production has led India to become one of the leading players in the global cotton market. Nearly two-thirds of India’s cotton production is concentrated in the states of Maharashtra, Gujarat, Andhra Pradesh, and Telangana, collectively known as the Cotton Basket of India. Maharashtra leads in terms of area under cultivation with 41.2 lakh hectares, followed by Gujarat at 27.1 lakh hectares, and Telangana at 17.9 lakh hectares. Together, these three states contribute to 72% of the country’s total cotton production.
Cotton cultivation in India encompasses both rainfed and irrigated areas, with approximately 62% of the cotton produced in rainfed regions and 38% on irrigated lands. India boasts the growth of all four known species of cultivated cotton, contributing to the country’s diverse cotton industry.
The cotton industry in India is geared towards apparel exports, significantly impacting the textile sector. Cotton- based apparel accounts for approximately 51% of India’s overall apparel exports, with roughly 74% of apparel exported from India being cotton-made.
Furthermore, cotton is freely exportable from India, with major export destinations including the United States, Bangladesh, China, Vietnam, Pakistan, Indonesia, Taiwan, and Thailand, among others. Bangladesh has been India’s largest importer of cotton since FY 2015.
India holds a prominent position in the global cotton market, serving as the second-largest exporter worldwide after the USA and the second-largest consumer after China.
Government Initiatives for the Cotton Sector in India
• Amended Technology Upgradation Fund Scheme (ATUFS): The government has implemented the ATUFS, which aims to promote modernization and technological advancements in the cotton-spinning industry, facilitating increased efficiency and productivity.
• Market Access Initiative (MAI) Scheme: Under this scheme, the government provides rebates on state and central taxes and levies integrated into production, offering support to cotton exporters, thus enhancing the competitiveness of the sector in the global market.
• Schemes for Skill Development: Initiatives like SAMARTH (Scheme for Capacity Building in the Textile Sector) are introduced to address the shortage of skilled workers in the textile sector by training 10 lakh individuals, thereby bolstering the workforce and enhancing expertise.
• Mega Investment Textiles Parks (MITRA): The government’s MITRA scheme, launched in the 2021- 22 Union Budget, focuses on establishing seven textile parks over three years. These parks are intended to drive significant investments and growth in the cotton sector.
• Collaboration with Industry Bodies: The Confederation of Indian Textile Industry (CITI) collaborates with cotton
farmers in Rajasthan, Madhya Pradesh, and Maharashtra, working with around 90,000 farmers across 1700 villages to improve cotton yield and sustainable production.
• Cotton Corporation of India (CCI): The CCI, established in 1970, plays a pivotal role in stabilizing cotton prices through price support measures, procuring raw cotton for textile mills, and ensuring a consistent supply of raw materials for the textile industry. Additionally, the government has introduced financial assistance schemes for cotton farmers to purchase quality seeds, contributing to the sector’s growth and sustainability. New textile parks and initiatives to promote natural fibers like cotton further emphasize the government’s commitment to the cotton industry’s development.
ELECTRONIC SECTOR
E-commerce
E-commerce is the buying and selling of goods and services over the internet. It is conducted over computers, tablets, smartphones, and other smart devices. It can be a substitute for physical stores, though some businesses choose to maintain both.
Types of E-commerce models
Business-to-Consumer (B2C): B2C e-commerce companies sell directly to the product end-user. Instead of distributing goods to an intermediary, a B2C company performs transactions with the consumer that will ultimately use the goods.
Business-to-Business (B2B): Similar to B2C, an e-commerce business can directly sell goods to a user. However, instead of being a consusmer, that user may be another company. B2B transactions often entail larger quantities, greater specifications, and longer lead times.
Business-to-Government (B2G): Some entities specialize as government contractors providing goods or services to agencies or administrations. Similar to a B2B relationship, the business produces items of value and remits those items to an entity.
Consumer-to-Consumer (C2C): Established companies are the only entities that can sell things. E-commerce platforms such as digital marketplaces connect consumers with other consumers who can list their own products and execute their own sales.
Consumer-to-Business (C2B): Modern platforms have allowed consumers to more easily engage with companies and offer their services, especially related to short-term contracts, gigs, or freelance opportunities.
Consumer-to-Government (C2G): Less of a traditional e-commerce relationship, consumers can interact with administrations, agencies, or governments through C2G partnerships. These partnerships are often not in the exchange of service but rather, the transaction of obligation.
Indian E-commerce Industry
• In recent years India has experienced a boom in internet and smartphone penetration. The number of internet connections in 2021 increased significantly to 830 million, driven by the ‘Digital India’ programme. Out of the total internet connections, ~55% of connections were in urban areas, of which 97% of connections were wireless.
• The smartphone base has also increased significantly and is expected to reach 1 billion by 2026. This has helped India’s digital sector and it is expected to reach US$ 1 trillion by 2030.
• This rapid rise in internet users and smartphone penetration coupled with rising incomes has assisted the growth of India’s e-commerce sector.
• India’s e-commerce sector has transformed the way business is done in India and has opened various segments of commerce ranging from business-to- business (B2B), direct-to-consumer (D2C), consumer-to- consumer (C2C) and consumer-to-business (C2B).
• After China and the US, India had the third-largest online shopper base of 150 million in FY21 and is expected to be 350 million by FY26.
Growing Demand
• India’s social commerce has the potential to expand to
US$16–20 billion in FY25, growing at a CAGR of 55-60%.
• India’s e-commerce market is expected to reach US$ 111 billion by 2024 and US$ 200 billion by 2026.
• India’s electronic sector recorded rapid growth with six time increase from 2014-15 to with historical production of worth ₹11.3 lakh crore in 2024–25.
• India is the second-largest mobile phone manufacturer of the world with production of ₹2 lakh crore in 2024–25
Attractive Opportunities
• India’s e-commerce market is expected to reach US$ 350 billion by 2030.
Policy Support
• 100% FDI is allowed in B2B e-commerce.
• 100% FDI under the automatic route is permitted in the marketplace model of E-commerce.
Government Initiatives
• The Indian government has launched several projects since 2014. These include Digital India, Made in India, Start-up India, Skill India, and Innovation Fund.
• In a bid to systematise the onboarding process of retailers on e-commerce platforms, the Department for Promotion of Industry and Internal Trade (DPIIT) is reportedly planning to utilise the Open Network for Digital Commerce (ONDC) to set protocols for cataloguing, vendor discovery and price discovery.
• National Retail Policy: The government had stated that
offline retail and e-commerce needed to be managed in an integrated manner and had identified five areas in its proposed national retail policy: ease of doing business, rationalization of the licence process, digitisation of retail, focus on reforms, and an open network for digital commerce.
E-commerce businesses were instructed to include the nation of origin with product listings by the Consumer Protection (e-commerce) Rules 2020, which were announced by the Consumer Affairs Ministry. The companies will also be required to disclose the criteria used to determine which products are included on their platforms.
Government e-Marketplace (GeM) and Union Bank of India inked a Memorandum of Understanding (MoU) to enable a transparent, cashless, and paperless payment mechanism for a range of services.
To promote digitization, the government launched a number of programs under the Digital India movement, including Umang, Start-up India Portal, Bharat Interface for Money (BHIM), etc.
The government required permanent account numbers (PANs) for international businesses running e-commerce platforms in India in October 2020, revising the equalization levy regulations of 2016. The sale of goods or the provision of services through a non-resident ecommerce operator was subject to a 2% tax in the FY21 budget.
Significant government investment in the deployment of 5G fiber networks will support increased e-commerce in India.
Manufacturing Sector in India
Manufacturing is emerging as an integral pillar in the country’s economic growth, thanks to the performance of key sectors like automotive, engineering, chemicals, pharmaceuticals, and consumer durables.
The Indian manufacturing industry generated 16-17% of India’s GDP pre-pandemic and is projected to be one of the fastest growing sectors.
India is the third most sought-after manufacturing destination in the world and has the potential to export goods worth US$ 1 trillion by 2030.
The Indian manufacturing sector is steadily moving toward more automated and process-driven manufacturing, which is projected to improve efficiency and enhance productivity.
By 2025, the Indian government wants to see 25% of the country’s production come from manufacturing through various programs and initiatives.
Due to factors like power growth, long-term employment prospects, and skill routes for millions of people, India has a significant potential to engage in international markets. Several factors contribute to their potential.
• First off, these value chains are well positioned to benefit from India’s advantages in terms of raw materials, industrial expertise, and entrepreneurship.
• Second, they can take advantage of four market opportunities: expanding exports, localising imports, internal demand, and contract manufacturing.
• India’s target to increase the share of GDP is 25% by 2035 and become the third largest economy with $35 trillion economy by 2047
Agro Based Industries
Sugarcane and Sugar Industry in India
Sugarcane is the second largest cash crop in India after cotton. India is the second largest producer of sugar worldwide and is tipped to soon overtake Brazil, the number one producer. The sugar produced in India is more than our domestic demand
and is exported thereby contributing to our forex reserves and helping in growing our GDP. This industry is responsible for directly employing nearly 5 crore people. It also produces biofuel which is a cleaner option and is being mixed with petrol to reduce greenhouse gas emissions. Its byproducts like bagasse and molasses are used in paper industry and as cattle feed respectively.
Geographic Spread: Even though however more sugarcane is grown in Northern India more sugar is produced from the peninsular region. This is because higher sugar content
is found in the South Indian sugarcane and also because sugar mills in Maharashtra; which are owned by co- operative societies tend to be better managed and have better machinery while the mills in UP are old and often use outdated technology affecting the production of sugar.
North India: Dominated by Uttar Pradesh, followed by Bihar, Haryana, and Punjab.
South India: Led by Maharashtra, with Karnataka, Tamil Nadu, and Andhra Pradesh following closely.
Challenges of the Sugar Industry in India
• Lacking Economies of Scale: Sugarcane is a perishable raw commodity and cannot be transported long distances. This means that mills have to be close to the farms which is why they are small. This means that they cannot reap the benefits of economies of scale.
• Crop Volatility: There is no consistency of the sugarcane production as farmers may choose to produce another cash crop.
• Low Yields & Conversion: Inefficient production methods result in high costs compared to global averages however the output of sugarcane per hectare in India is also low.
• Seasonal Unemployment: Sugarcane’s seasonality creates unemployment gaps for farmers and mills.
• Environmental Concerns: Intensive sugarcane cultivation can deplete soil quality and also water tables since it is a water intensive crop.
• 2014 Crisis: These problems became much more significant in 2014 when there was a bumper crop and the market was suddenly flooded with sugarcane. Many farmers started demanding a higher price as compensation for their efforts while the glut meant that the mill owners were unable to match their demands.
Reforms in the Sugarcane Sector
• Dr. C Rangarajan Committee, 2012 suggested deregulation of Sugarcane industry and provided the following
• Removal of export bans and distance restrictions between mills as the requirement of the minimum distance between mills was leading to a monopoly by mill owners.
• Freedom for selling by-products.
• Encouragement of private and public sector participation in mill administration
• Fair & Remunerative Price (FRP): Commission for Agricultural Costs and Prices sets minimum sugarcane price based on stakeholder consultations. States can set higher State Advised Prices (SAP) which shall be paid by mills to farmers.
• Biofuel Policy (2018): Encourages using surplus sugarcane for ethanol production, which helps boost revenues for farmers by increasing demand.
• Revenue Sharing Systems: Implemented by some states to improve mill efficiency and benefit sharing.
• Productivity Research: Government-funded research focuses on improving sugarcane yield.
• Ethanol Blending In India: Ethanol blending involves mixing ethanol with petrol, reducing greenhouse gas emissions compared to pure gasoline. Studies show that grain-based ethanol can cut emissions by 44% to 52%
compared to gasoline. Emerging technologies could increase this reduction to nearly 70% in the coming years.
India’s Ethanol Blending Target: The government expresses confidence in achieving the 20% target of ethanol blended petrol by 2025. The plan is being implemented in two phases, initially covering 15 cities and later expanding nationwide.
Sugarcane production in the country has increased from 4053.99 lakh tonnes in 2020-21 to 4546.11 lakh tonnes in 2024-25
Tea Industry in India
India exports tea to more than 25 countries throughout the world. Following states contribute to India’s tea production
Assam: Known for its robust and malty black tea, Assam is the largest tea-producing state in India.
Darjeeling: Famous for its high-quality Darjeeling tea, this region is located in the Himalayan foothills.
Darjeeling tea is globally recognized for its unique aroma and flavor.
Grown at elevations ranging from 600 to 2,000 meters, the cool climate and high altitudes contribute to the distinctive qualities.
The Darjeeling tea industry faces challenges such as labor shortages and climate change effects.
Nilgiri Hills: Located in Tamil Nadu and parts of Kerala and Karnataka, these hills produce a variety of teas, including Nilgiri tea.
Southern States: Kerala and Karnataka also contribute to India’s tea production, with the Western Ghats region being a prominent area.
EASE OF DOING BUSINESS
The Ease of Doing Business (EoDB) index is a ranking system established by the World Bank Group. In the EODB index, ‘higher rankings’ (a lower numerical value) indicate better,
usually simpler, regulations for businesses and stronger protections of property rights. The research presents data for 190 economies and aggregates information from 10 areas of business regulation
• Starting a Business of all
• Dealing with Construction Permits
• Getting Electricity
• Registering Property
• Getting Credit
• Protecting Minority Investors
• Paying Taxes
• Trading across Borders
• Enforcing Contracts
• Resolving Insolvency
Rankings and weights on each of the mentioned parameters are used to develop an overall EoDB ranking. A high EoDB ranking means the regulatory environment is more conducive for starting and operating businesses.
INDIA – Ease of Doing Business Ranking
India has emerged as one of the most attractive destinations not only for investments but also for doing business. India jumped 79 positions from 142nd (2014) to 63rd (2019) in ‘World Bank’s Ease of Doing Business Ranking 2020’. This remarkable improvement in India’s EoDB index rating is the result of positive reforms. Aside from these noteworthy advancements, India is ranked 13th out of 190 economies in terms of protecting minority investors and 25th out of terms of getting credit.
• Construction Permits: India’s ranking on this parameter has improved from 184 in 2014 to 27 in 2019. This improvement has been mainly on the account of a decreasing the number of procedures and time taken for obtaining construction permits in India.
• Getting Electricity: India’s ranking on this parameter has improved from 137 in 2014 to 22 in 2019. It takes just 53 days and 4 procedures for a business to get an electricity connection in India
Government Initiatives
The Government is spearheading the initiatives under Ease of Doing Business and Reducing Compliance Burden which are aimed at creating a conducive business environment. These initiatives aim to extend benefit to all entities/sectors/ industries of the economy, including startups.
The key focus areas of the initiatives are
• Simplification of procedures related to applications, renewals, inspections, filing records, etc.,
• Rationalization by repealing, amending or subsuming redundant laws,
Digitization by creating online interfaces eliminating manual forms and records, and
Decriminalization of minor technical or procedural defaults.
In addition to ongoing schemes of various Departments and Ministries, the Government has taken various steps to boost domestic and foreign investments in India. These include the introduction of Goods and Services Tax, reduction in corporate taxes, financial market reforms, consolidation of public sector banks, enactment of four labour codes, Foreign Direct Investment (FDI) policy reforms, reduction in compliance burden, policy measures to boost domestic manufacturing through public procurement orders, Phased Manufacturing Programme, to name a few. To promote FDI in the country, the Government has put in place an investor-friendly policy, wherein most sectors except certain strategically important sectors are open for 100% FDI under the automatic route. Further, the policy on FDI is reviewed on an ongoing basis, to ensure that India remains an attractive and investor friendly destination. Changes are made in the policy after having consultations with stakeholders including apex industry chambers, associations, representatives of industries/groups and other organizations.
Furthermore, the Government has unveiled National Single Window System (NSWS) to provide a single platform to enable the identification and obtaining of approvals and clearances needed by investors, entrepreneurs, and businesses in India. NSWS is providing a single interface to apply for all Government to Business (G2B) clearances from various Ministries/Departments as well as eliminating duplication of work by auto-populating form fields across diff erent approvals based on single investor profile.
MAKE IN INDIA
Make in India is a major national programme of the Government of India designed to facilitate investment, foster innovation, enhance skill development, protect intellectual property and build best in class manufacturing infrastructure in the country.
The principal aim of this endeavour is to draw in global investments and fortify India’s manufacturing industry.
The Department for Promotion of Industry and Internal Trade (DPIIT), under the Ministry of Commerce and Industry of the Government of India, is in charge of it.
The Make in India initiative is crucial to India’s economic development since it seeks to leverage the country’s talent pool, provide new job opportunities, and strengthen the country’s secondary and tertiary sectors.
The programme also aims at improving India’s rank on the Ease of Doing Business index by eliminating the unnecessary laws and regulations, making bureaucratic processes easier, making the government more transparent, responsive and accountable.
The “Make in India” initiative is based on four
pillars, which have been identified to give a boost to entrepreneurship in India, not only in manufacturing but also other sectors.
• New Processes: ‘The aim is to de-license and de- regulate the industry during the entire life cycle of a business.
• New Infrastructure: Availability of modern and facilitating infrastructure is a very important requirement for the growth of industry. Government intends to develop industrial corridors and smart cities to provide infrastructure based on state-of-the-art technology with modern high-speed communication and integrated logistic arrangements.
• New Sectors: ‘Make in India’ has identified 25 sectors in manufacturing, infrastructure and service activities and detailed information is being shared through interactive web-portal and professionally developed brochures. FDI has been opened up in Defence Production, Construction and Railway infrastructure in a big way.
• New Mindset: Industry is accustomed to see Government as a regulator. ‘Make in India’ intends to change this by bringing a paradigm shift in how the Government interacts with industry. The Government will partner industry in the economic development of the country. The approach will be that of a facilitator and not a regulator.
Start-Up ecosystem in India
The Indian startup ecosystem is built on several key pillars, including government support, access to capital, a growing talent pool, and a supportive culture for entrepreneurship. The government has implemented a range of policies and initiatives aimed at encouraging startups, such as the Startup India campaign launched in 2016. Following are some other key benefits
• Improved funding access: More venture capitalists, angel investors, and overall funding are available compared to the past.
• Talented workforce: India has a growing pool of skilled professionals like engineers and developers. Returning Indians with global experience add further value.
• Supportive environment: Entrepreneurship is increas- ingly viewed as a viable career option, with events, co- working spaces, and incubators fostering this culture.
• Incubators and accelerators: These organizations offer resources, mentorship, funding, and networking opportunities for startups. Some of the most prominent incubators and accelerators in India include the Indian Angel Network, 500 Startups, and the Microsoft Accelerator.
• Venture capital firms: They provide crucial funding for growth and expansion, along with strategic advice. Some of the most active venture capital firms in India include Sequoia Capital, Accel Partners, and SAIF Partners
Start- Up India
The Start-up India initiative was announced by the Prime Minister of India on 15th August, 2015. The flagship initiative has an objective to build a strong eco-system for nurturing innovation and Startups in the country that will drive sustainable economic growth and generate large scale employment opportunities.
Further to this, an Action Plan for Startup India was unveiled by the Prime Minister of India on 16th January 2016. The action plan comprises 19 action items spanning across areas such as “Simplification and handholding”, “Funding support and incentives” and “Industry-academia partnership and incubation”.
Salient features of Startup India action plan
Compliance Regime based on Self-Certification with an objective to reduce the regulatory burden on Startups thereby allowing them to focus on their core business and keep compliance cost low.
Startup India Hub with an objective to create a single point of contact for the entire Startup ecosystem and enable knowledge exchange and access to funding.
Rolling out of Mobile App and Portal with an objective to serve as the single platform for Startups for interacting with Government and Regulatory Institutions for all business needs and information exchange among various stakeholders.
Legal Support and Fast-tracking Patent Examination at Lower Costs with an objective to promote awareness and adoption of IPRs by Startups and facilitate them in protecting and commercializing the IPRs by providing access to high quality Intellectual Property services and resources, including fast-track examination of patent applications and rebate in fees.
Relaxed Norms of Public Procurement for Startups with an objective to provide an equal platform to Startups across sectors vis-à-vis the experienced entrepreneurs/ companies in public procurement.
Faster Exit for Startups with an objective to make it easier for Startups to wind up operations.
• Providing Funding Support through Fund of Funds with a Corpus of Rs. 10,000 crores with an objective to provide funding support for development and growth of innovation driven enterprises.
• Credit Guarantee fund for Startups with the objective to catalyze entrepreneurship by providing credit to innovators across all sections of society.
• Tax Exemptions on Capital Gains with an objective to promote investments into Startups by mobilizing the capital gains arising from sale of capital assets.
• Tax Exemptions to startups for 3 Years with an objective to promote the growth of Startups and address working capital requirements.
• Tax Exemption on Investments above Fair Market Value with an objective to encourage seed-capital investment in Startups.
• Organizing Startup Fests for Showcasing Innovation and Providing a Collaboration Platform with an objective to galvanize the Startup ecosystem and to provide national and international visibility to the Startup ecosystem in India.
• Launch of Atal Innovation Mission (AIM) with an objective to serve as a platform for promotion of world- class Innovation Hubs, Grand Challenges, Startup businesses and other self-employment activities, particularly in technology driven areas.
• Harnessing Private Sector Expertise for Incubator Setup with an objective to ensure professional management of Government sponsored/funded incubators, Government will create a policy and framework for setting-up of incubators across the country in public private partnership.
• Building Innovation Centers at National Institutes with an objective to propel successful innovation through augmentation of incubation and R&D efforts.
• Setting up of 7 New Research Parks Modelled on the Research Park Setup at IIT Madras with an objective to propel successful innovation through incubation and joint R&D efforts between academia and Industry.
• Promoting Startups in the Biotechnology Sector with an objective to foster and facilitate bio-entrepreneurship.
• Launching of Innovation Focused Programs for Students with an objective to foster a culture of innovation in the field of Science and Technology amongst students.
• Annual Incubator Grand Challenge with an objective to support creation of successful world class incubators in India.
Skill Development and Entrepreneurship Landscape
• The country, however, has a big challenge ahead as it is estimated that only 4.69%of the total workforce in India has undergone formal skill training as compared to 68%
in UK, 75% in Germany, 52% in USA, 80% in Japan and 96% in South Korea.
On demand side, a skill gap study has been conducted by NSDC over 2010-2014, which indicates that there is an additional net incremental requirement of 109.73 million skilled manpower by 2022 in twenty-four key sectors.
The public’s perception of skilling, which is seen as the final resort for people who have not been able to advance or have chosen to leave the traditional academic system, is one of the main issues facing the nation today.
India’s states have different problems when it comes to skill development and demography. To meet the issues posed by the shifting demographics, there needs to be a common sense of urgency.
The numerous grant-based, free training programs that are now offered, while essential, have several drawbacks, particularly with regard to quality and employability.
There are numerous evaluation and certification programs in the nation, which produces uneven results and perplexes employers.
One of the main areas of worry is the availability of high- quality trainers. The creation of programs for training trainers is not given enough attention, and there are no established career paths for trainers.
One of the biggest challenges of skill development in our country is that 93% of the workforce is in the informal/ unorganised sector. Consequently, it is difficult to map existing skills in the unorganised sector and gauge the skilling requirement in the sector. On the other hand, the rate of job growth in the informal sector is estimated to be twice that in the formal sector.
Women constitute almost half of the demographic dividend. The key challenge here is to increase their participation in the country’s labour force, which is directly linked to economic growth of the country.
In India, only 0.09 companies were registered for every 1,000 working age people among the lowest rates of G20 countries in 2011.
National Skill Development and Entrepreneurship Policy 2015 attempts to address these concerns. It tries to bring the world of education and training closer to the world of work so as to enable them to together build a Strong India.
National Policy for Skill Development and Entreprene- urship 2015
The National Policy on Skill Development was first formulated in 2009 and it provided the framework for skill development activities in the country. Over the years, changes in the macro environment, and the experience gained through implementation of various skill development programmes in the country have necessitated changes in the policy. Accordingly, the National Skill Development Policy, 2015 was formulated, and it supersedes the Policy of 2009.
Vision: To create an ecosystem of empowerment by Skilling on a large Scale at Speed with high Standards and to promote a culture of innovation-based entrepreneurship which can generate wealth and employment so as to ensure Sustainable livelihoods for all citizens in the country.
Mission: The mission is to
• Create a demand for skilling across the country;
• Correct and align skilling with required competencies;
• Connect the supply of skilled human resources with sectoral demands;
• Certify and assess in alignment with global and national standards; and
• Catalyse an ecosystem wherein productive and innovative entrepreneurship germinates, sustains and grows leading to creation of a more dynamic entrepreneurial economy and more formal wage employment.
Objectives
• The core objective of the Policy is to empower the individual, by enabling her/him to realize their full potential through a process of lifelong learning where competencies are accumulated via instruments such as credible certifications, credit accumulation and transfer, etc.
• The core objective of the entrepreneurship framework is to coordinate and strengthen factors essential for growth of entrepreneurship across the country.
Financing
• The National Skill Development Fund (NSDF) has been set up by the Government of India with the objective of encouraging skill development in the country.
• A public Trust set up by Government of India is the custodian of the Fund. The Fund acts as a receiver for all donations, contribution in cash or kind from all contributors (including Government, multilateral organizations, corporations etc) for furtherance of the objectives of the Fund.
• All Government schemes across sectors will be encouraged to apportion a certain percentage (10%) of the scheme budget towards skilling of human resources in local regions in the required sector.
• To attract funds from industry, companies will be encouraged to spend at least 25% of their Corporate Social Responsibility (CSR) funds on skill development initiatives directly or through NSDF.
• A Credit Guarantee Fund for skill development and a ‘National Credit Guarantee Trustee Company’ (NCGTC) has been set up to support the initiative of loans for the purpose of skilling and will be used to leverage credit financing in the skill landscape.
Initiatives for Investments in India
The Government of India is making continuous efforts under Investment Facilitation for implementation of Make in India action plans to identify potential investors.
These include the National Infrastructure Pipeline, Reduction in Corporate Tax, easing liquidity problems of NBFCs and Banks, policy measures to boost domestic manufacturing.
The Government of India has also promoted domestic manufacturing of goods through public procurement orders, Phased Manufacturing Programme (PMP), Schemes for Production Linked Incentives of various Ministries.
Further, the National Single Window System (NSWS) has been soft-launched in September 2021 to improve the ease-of-doing-business by providing a single digital platform to investors for approvals and clearances.
To promote local industry by providing them preference in public procurement of Goods, Works and Services, the Public Procurement (Preference to Make in India) Order 2017 was also issued.
Recognising the importance of semiconductors in the world economy, the Government of India has launched a USD 10 billion incentive scheme to build a semiconductor, display, design ecosystem in India.
The Government has also launched a programme for multimodal connectivity to manufacturing zones in the country, called the Prime Minister’s Gatishakti programme, which will ensure logistical efficiency in business operations through the creation of infrastructure that improves connectivity. This will enable faster movement of goods and people, enhancing access to markets, hubs, and opportunities, and reducing logistics cost.
The One-District-One-Product (ODOP) initiative is another manifestation of the ‘Make in India’ vision for facilitating promotion and production of the indigenous products from each district of the country and providing a global platform to the artisans and manufacturers of handloom, handicrafts, textiles, agricultural and processed products, thereby further contributing to the socio-economic growth of various regions of the country.
To address the import of low-quality and hazardous toys and to enhance domestic manufacturing of toys, several strategic interventions have been taken by the government. Some key initiatives include increase of Basic Custom Duty from 20% to 60%, implementation of Quality Control Order, mandatory sample testing of imported toys, granting more than 850 BIS licenses to domestic toy manufacturers, development of toy clusters etc.
Smart Manufacturing
• ‘Smart manufacturing’ synonymously used with ‘Industry 4.0’, shortened to I4.0 or simply I4 is a technology-driven approach that encompasses fully-integrated, collaborative manufacturing systems that employ internet-integrated machinery to monitor manufacturing processes in real- time via an open infrastructure.
• Smart manufacturing involves interoperable systems, intelligent automation, multi-scale dynamic simulation and includes 3D printing, big data processing, advanced industrial robotics with networked sensors, industrial internet of things (IIoT), and distributed manufacturing technologies with strong cybersecurity.
• These cyber-physical systems entail synergy of production and digital technologies to enable rapid adaptability and design changes, using data analytics that enables newer areas of innovation to optimize manufacturing by creating enhanced quality products, accelerating productivity, increasing energy efficiency, and sustaining safety.
Market drivers
• The Prime Minister launched the Centre for the fourth industrial revolution in 2018.
• The Ministry of Heavy Industry & Public Enterprises launched ‘Samarth Udyog Bharat 4.0’ as an Industry 4.0 initiative.
• The National Association of Software and Services Companies (NASSCOM) inaugurated centers for AI and data science in Bengaluru and Hyderabad to develop emerging disruptive technologies such as AI/ML and leverage the power of data science.
• CII Smart Manufacturing Platform is tasked in making India an Industry 4.0 enabled country, while working with the government agencies (central & state), technology providers, user industries, consulting and audit agencies, education & research institutions, and international organisations to promote and develop excellence in Industry 4.0 among Indian industry.
Challenges for the Indian manufacturing industry
• Redefining the manufacturing organization of the future: The growth prospects powered by technological innovations, the lessons learned during the pandemic, and potential future challenges like market competition and climate changes, are factors that are compelling manufacturing companies to redefine their vision of a “manufacturing organization of the future.”
• Focused solution themes to achieve top-line and bottom- line aspiration.
• Continuous, incremental, and accelerated monetiz- ation: The transformation initiative should be resilient enough to sustain the constant cost pressure and monetize the operations.