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A PIB Backgrounder issued for the 80th Independence Day puts manufacturing at about 16-17% of GDP with over 27 million workers, and manufacturing GVA growing at a CAGR of 10.88% between 2022-23 and 2025-26 at constant prices on the revised 2022-23 base.
Semicon India Programme 2.0 was approved in July 2026 with an outlay of ₹1,27,500 crore, building on Semicon 1.0's ₹76,000 crore approved in December 2021; twelve units with investments above ₹1.64 lakh crore have been approved and Micron, Kaynes and CG Semi are already in commercial production.
Electronics production rose 15.8% to ₹13.11 lakh crore in FY 2025-26, 99.2% of mobile phones used in India are made domestically, and smartphones became India's top individual exported commodity in FY 2025-26, surpassing petroleum and gems and jewellery.
A ₹62,500 crore Mobile Phone Manufacturing Scheme was approved on 15 July 2026 for FY 2026-27 to FY 2030-31, with incentives of 2.25% to 5%.
Sectoral packages span shipbuilding (₹69,725 crore announced in September 2025), containers (₹10,000 crore CMAS in Budget 2026-27), pharmaceuticals (three PLI schemes worth ₹25,360 crore) and solar PV (₹24,000 crore across two PLI tranches).
Turn India into a global hub for manufacturing, design and innovation and attract investment
Key: Launched on 25 September 2014 and implemented by the Department for Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce and Industry. It identified 25 sectors — including defence manufacturing, electronics, pharmaceuticals, textiles and automobiles — and rests on four pillars: New Processes, New Infrastructure, New Sectors and New Mindset.
Pay incentives on incremental sales of goods manufactured in India to build scale and cut import dependence
Key: Launched in 2020 with a combined outlay of about ₹1.97 lakh crore across 14 sectors, including automobiles and auto components, electronics and IT hardware, telecom, pharmaceuticals, solar modules, textiles, white goods, drones and advanced chemistry cell batteries. Sector-specific PLIs cited in the backgrounder include LSEM electronics (~₹96,000 crore of investment attracted), automobiles (₹25,938 crore outlay), pharmaceuticals (₹25,360 crore across three schemes) and solar PV modules (₹24,000 crore across two tranches).
Give small, medium and large industries a single policy framework covering the whole manufacturing chain
Key: Announced in the Union Budget 2025-26 with five focal areas: ease and cost of doing business, a future-ready workforce for in-demand jobs, a vibrant MSME sector, availability of technology, and quality products.
Bring infrastructure planning across ministries onto one geospatial platform to cut project delays and logistics costs
Key: Launched on 13 October 2021 as a National Master Plan for Multi-modal Connectivity, integrating the planning of 16 central ministries with state governments.
Reduce logistics costs and improve service quality across modes
Key: Launched on 17 September 2022; its stated aims include raising India's Logistics Performance Index ranking into the top 25 countries by 2030 and mainstreaming logistics in skilling and higher education.
Build a domestic semiconductor and display manufacturing ecosystem covering fabs, packaging and compound semiconductors
Key: Semicon 1.0 was approved in December 2021 with a ₹76,000 crore outlay; Semicon 2.0 was approved in July 2026 with ₹1,27,500 crore. As of July 2026, twelve units with over ₹1.64 lakh crore of investment had been approved and three — Micron, Kaynes and CG Semi — had begun commercial production.
Deepen domestic value addition and supply-chain resilience in mobile phone manufacturing beyond assembly
Key: Approved on 15 July 2026 with a ₹62,500 crore budget for five years, FY 2026-27 to FY 2030-31. Incentives range from 2.25% to 5%, with additional support for local sourcing, Indian brands, design and R&D.
Create integrated textile parks with spinning, weaving, processing and garmenting in one location
Key: PM Mega Integrated Textile Region and Apparel Parks at seven sites — Virudhunagar (Tamil Nadu), Warangal (Telangana), Navsari (Gujarat), Kalaburagi (Karnataka), Dhar (Madhya Pradesh), Lucknow (Uttar Pradesh) and Amravati (Maharashtra) — with an outlay of ₹4,445 crore up to 2027-28.
Raise India's annual shipbuilding capacity to 4.5 million Gross Tonnage
Key: ₹19,989 crore outlay within the ₹69,725 crore maritime package announced in September 2025. Greenfield shipbuilding clusters — proposed in Andhra Pradesh, Gujarat and Tamil Nadu — get 100% capital support for common infrastructure through a 50:50 Centre-State Special Purpose Vehicle; existing shipyards get 25% capital assistance for brownfield expansion of dry docks, ship lifts, fabrication facilities and automation.
Provide long-term financing to a capital-hungry maritime sector
Key: A ₹25,000 crore corpus comprising a ₹20,000 crore Maritime Investment Fund with 49% government equity participation and a ₹5,000 crore Interest Incentivization Fund to lower borrowing costs for shipyards.
Offset the cost disadvantage Indian shipyards face against foreign competitors
Key: ₹24,736 crore allocated; guidelines issued on 26 December 2025.
Build domestic capacity for shipping containers, which India has largely imported
Key: Announced in the Union Budget 2026-27 with ₹10,000 crore over five years, targeting annual capacity of up to 7.5 lakh TEUs — about ten times existing capacity. In July 2026 India rolled out its first domestically manufactured EXIM container for A.P. Moller-Maersk, unveiled at the Maersk-CONCOR Inland Container Depot at Dadri, Uttar Pradesh.
Subsidise electric vehicle purchase and charging infrastructure
Key: Launched in September 2024 with a ₹10,900 crore outlay supporting about 28.30 lakh EVs — e-two-wheelers, e-three-wheelers, e-trucks, e-buses and e-ambulances. ₹4,391 crore was allocated for 14,028 e-buses, of which 14,000 have been deployed, and ₹2,000 crore for public charging stations.
Cut the cost of manufacturing bulk drugs by providing shared world-class infrastructure
Key: Approved in 2020 to set up three parks; the three were approved in Andhra Pradesh, Gujarat and Himachal Pradesh in FY 2022-23.
Advance healthcare through knowledge, technology and innovation in biopharmaceuticals
Key: Strategy for Healthcare Advancement through Knowledge, Technology and Innovation, announced in the Union Budget 2026-27 with an outlay of ₹10,000 crore over five years.
Build the Electronics System Design and Manufacturing (ESDM) base
Key: The National Policy on Electronics, SPECS (Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors), EMC 2.0 (Electronics Manufacturing Clusters) and, more recently, the Electronics Components Manufacturing Scheme (ECMS).
Raise competitiveness across the cotton-to-garment value chain
Key: The PLI Scheme for Textiles, PM MITRA Parks, the National Technical Textiles Mission, the Textiles Export Promotion Mission, the National Fibre Mission and the Mission for Cotton Productivity.
Implements the Semicon India Programme — appraising and approving fab, display fab, compound semiconductor and packaging proposals, and building the design ecosystem. It operates as an independent business division within the Digital India Corporation.
Nodal department for Make in India, industrial policy, FDI policy and ease of doing business.
Compiles and releases the Index of Industrial Production monthly, about six weeks after the reference month, along with GDP and price indices. Manufacturing growth figures such as the 7.8% for June 2026 come from this series.
The IIP is a volume index that measures the short-term change in the physical output of industry, grouped both by sector (mining, manufacturing, electricity) and by use (primary goods, capital goods, intermediate goods, infrastructure/construction goods, consumer durables and consumer non-durables). It is compiled monthly by the National Statistical Office under MoSPI. The base year has been revised from 2011-12 to 2022-23 with effect from 1 June 2026 — the tenth such revision — expanding coverage from 839 items in 407 item groups to 1,042 products in 463 item groups and, for the first time, tracking rare earth minerals, renewable energy, gas supply, water supply and waste management. The revision aligns the IIP base with the new GDP and inflation series, which is why growth figures in this backgrounder are quoted on the 2022-23 base.
Simple Analogy: Changing the base year is like re-photographing a family group after a decade: the same camera, but the picture now includes the people who joined in the meantime — solar power and rare earths, in this case — so the comparison is fair to today's industry.
| Aspect | Production Linked Incentive (PLI) | Semicon India Programme |
|---|---|---|
| What is subsidised | Incremental sales of goods manufactured in India | Capital expenditure on setting up fabs, display fabs, compound semiconductor and packaging units |
| When money flows | After production and sales targets are met | Fiscal support as the plant is built, on a share-of-project-cost basis |
| Coverage | 14 sectors with a combined outlay of about ₹1.97 lakh crore, launched 2020 | Semiconductors and displays; ₹76,000 crore (1.0, December 2021) and ₹1,27,500 crore (2.0, July 2026) |
| Implementing agency | Respective line ministries and departments | India Semiconductor Mission, a division of Digital India Corporation under MeitY |
| Typical outcome measured | Investment, incremental production, exports and jobs | Number of units approved, investment committed and units in commercial production |
The defence numbers repeated in this backgrounder — ₹1.78 lakh crore of production and ₹38,424 crore of exports — are the same data set used in the Ministry of Defence's own Independence Day material, showing how defence is now presented as a manufacturing sector rather than only a security subject.
Smartphones overtaking petroleum and gems and jewellery as India's top individual export commodity in FY 2025-26 marks a structural change in the export basket, with direct implications for the trade deficit and the rupee.
Semiconductor packaging, solar cells and EV batteries all depend on imported critical minerals, which is why the new IIP series tracks rare earth minerals for the first time and why the National Critical Mineral Mission runs alongside these manufacturing schemes.
Textiles employ over 45 million people — second only to agriculture — while manufacturing as a whole employs about 27 million in the organised count, a gap that explains why the National Manufacturing Mission places MSMEs among its five focal areas.
The maritime package uses three different instruments — capital subsidy (SbDS), a fund with 49% government equity (Maritime Investment Fund) and interest subvention (Interest Incentivization Fund) — a useful case study in blended finance for infrastructure.
GS Paper 3 > Indian Economy > Industrial Policy, Investment Models and Infrastructure
General Awareness > Government Schemes, Industry and Economy
General Awareness > Economy and Government Schemes
General Awareness > Current Affairs
Which of the following activities constitute real sector in the economy? 1. Farmers harvesting their crops 2. Textile mills converting raw cotton into fabrics 3. A commercial bank lending money to a trading company 4. A corporate body issuing Rupee Denominated Bonds overseas Select the correct answer using the code given below:
Answer: 1 and 2 only
Which of the following is NOT an example of an industrial district in India?
Answer: Darjeeling-Jalpaiguri region
Identify the group of districts that are NOT an example of industrial districts of India.
Answer: Darjeeling-Jalpaiguri region
Which of the following statements about light industries is correct?
Answer: Use light materials to make consumer goods
Which of the following correctly highlights a unique feature of India's textile industry?
Answer: It is self-reliant across the full value chain
PLI, Make in India, semiconductors and the IIP recur every year across Prelims, banking general awareness and SSC; the base-year revision of 2026 is new and highly likely to be tested.
Output minus intermediate consumption; sectoral growth such as the 10.88% manufacturing CAGR is measured in GVA, while GDP adds net product taxes.
Approved List of Models and Manufacturers — the list of solar modules and manufacturers eligible for use in government-supported projects; listed module capacity reached 100 GW in August 2025.
Twenty-foot Equivalent Unit, the standard measure of container capacity; CMAS targets up to 7.5 lakh TEUs of annual domestic manufacturing capacity.
Key Starting Material and Active Pharmaceutical Ingredient — the upstream chemical inputs of a medicine, where India has historically depended on imports; PLI created capacity for 218 of them.
Outsourced Semiconductor Assembly and Test — the back-end stage of chipmaking; nine of the twelve units approved under Semicon India are packaging units rather than fabs.