NITI Aayog identifies four key sectors to drive India’s global manufacturing ambition

NITI Aayog has released a report titled 'Key Sectors to Position India as a Global Manufacturing Hub', identifying four high-potential sectors that can play a pivotal role in advancing India’s ambition to emerge as a global manufacturing powerhouse. The report analyses the manufacturing potential of the chemicals, textiles, telecom, and networking equipment, and solar photovoltaic (PV) sectors, with a focus on strengthening domestic capabilities, enhancing competitiveness and accelerating export-oriented growth. 

The assessment examines India’s manufacturing landscape against global trends, sectoral growth opportunities, and international benchmarks. It evaluates a range of factors that influence manufacturing competitiveness, including market potential, infrastructure readiness, policy support, availability of raw materials, technology readiness, employment potential and India’s existing position in global value chains. 

The study seeks to identify sectors where targeted interventions can unlock significant growth opportunities, increase domestic value addition and reduce dependence on imports. It also draws on the experience of leading manufacturing economies to identify best practices and develop sector-specific strategies that can help address existing constraints and strengthen India’s position in global manufacturing. 

The assessment was undertaken through a four-phase framework. The first phase focused on shortlisting sectors based on their relative attractiveness, considering the size and growth prospects of domestic and global markets. The second phase involved a comprehensive assessment of the shortlisted sectors, evaluating their market potential, competitiveness and broader strategic relevance. The third phase examined international best practices and successful approaches adopted by leading manufacturing countries to identify lessons that could be adapted to the Indian context. The final phase focused on developing actionable, sector-specific recommendations, and a roadmap to strengthen competitiveness, unlock growth potential and position India as a global manufacturing hub. 

The current edition of the report focuses on four high-potential manufacturing sectors—chemicals, textiles, telecom and networking equipment, and solar PV manufacturing. The study is expected to be followed by reports covering eight additional sectors. 

India’s chemicals industry is broadly driven by three major consumption segments—petrochemicals and organic chemicals, specialty chemicals, and inorganic chemicals. Petrochemicals and organic chemicals constitute the largest segment and include polymers, synthetic fibres, performance plastics, building blocks, intermediates and end-products. According to the report, the sector has considerable potential to increase domestic value addition by expanding downstream production and improving feedstock utilisation. Promoting domestic manufacturing, improving competitiveness and strategically leveraging free trade agreements can help reduce import dependence, strengthen downstream capabilities and support sustainable growth of the industry. 

The textile and apparel sector remains one of India’s most important manufacturing industries, contributing approximately 2% to national GDP, 11% to manufacturing GVA and 9% of merchandise exports. It is also the country’s second-largest employer after agriculture, providing livelihoods to more than 4.5 crore people and supporting widespread MSME-led industrial development. In FY25, India exported textile products worth $37.7 billion, accounting for 4.1% of global textile and apparel exports and making the country the sixth-largest textile exporter globally. 

India is currently the world’s second-largest telecommunications market, with more than 120 crore subscribers, approximately 85% telecom penetration and nearly 75% internet usage. Recognising the sector’s strategic importance, the National Telecom Policy 2025 targets doubling the sector’s contribution to GDP and telecom product and service exports, creating one million new jobs and significantly increasing investment and R&D expenditure by 2030. 

According to the report, India’s telecom and electronics manufacturing ecosystem has substantial potential to enhance global competitiveness through deeper localisation and stronger domestic component manufacturing.  

The solar PV sector is another major opportunity for India’s manufacturing ambitions. The country had installed 106 GW of solar capacity by March 2025 and needs to add around 174 GW to achieve its 2030 target of 280 GW. The domestic PV market, estimated at ₹32,400 crore or $3.7 billion, is expected to grow at a CAGR of 17–20% between FY23 and FY30, driven by utility-scale solar, rooftop installations, open-access projects and demand associated with green hydrogen. 

The report identifies considerable scope for India to deepen domestic value addition in solar PV manufacturing by strengthening upstream capabilities and reducing import dependence. Technology partnerships and joint ventures, greater investment in R&D, performance-linked support, integrated clean-tech clusters and industry-led skilling have been identified as key priorities. Strengthening trade partnerships and government-to-government frameworks could further support exports and help Indian manufacturers gain access to global markets.