India is still just at 3.2% in the global manufacturing value addition, just from 1.5% since the Make In India initiative launched in 2014, according to a NITI Aayog report. Despite having the world’s largest population, India still trails China and other emerging economies in manufacturing capabilities.
Despite its flaws, the Make In India initiative has helped accelerate industrial growth. It started with low margin assembly, but moved towards self sufficiency and to serve global demand through a distributed supply chain. Here are four sectors that have defined this shift, and what they are aiming to do to address it.
| Sector | Where India stands | The gap |
| Electronics | ~25% of iPhones produced globally | Only ~20% components made locally |
| Pharmaceuticals | ~20% of global generics by volume | Only ~40% of APIs made domestically |
| Auto components | Established component base | Just ~8% of components exported |
| Chemicals | Sixth-largest producer | Just 3–3.5% share of the global value chain |
Electronics and smartphones
Where India stands: Apple’s decision to manufacture in India was hailed as a Make in India win, and India is now the world’s second-largest smartphone exporter . About 25% of iPhones produced globally are now made in India, according to widely cited sources.
The gap: That success began with assembly, the lowest-margin and final stage of making a phone. Local components make up only about 20% of the total. High-end sub-components such as semiconductors, advanced chips and complex camera modules are still imported.
What’s changing: India now makes enclosures, printed circuit board assemblies (PCBAs) and other components locally, and some of these are exported to China, as India is now being seen as a cost effective manufacturing hub for smartphone components as well, with about $2.5 billion worth of such sub assemblies being exported.
Pharmaceuticals and APIs
Where India stands: Long known as the “pharmacy of the world,” India supplies about 20% of the world’s generics by volume to developed and developing markets.
The gap: That position rests on imported inputs. The active pharmaceutical ingredients (APIs) behind these medicines have largely come from China. For some fermentation-based APIs, India lacks the technical expertise, so dependence on China remains heavy.
What’s changing: India now makes roughly 65% of the APIs it uses, and imports the rest . Backed by the Production Linked Incentive (PLI) scheme, the government has set up bulk drug parks in Gujarat, Andhra Pradesh and Himachal Pradesh to move towards self-sufficiency.
Who’s driving it: The Production Linked Incetive has helped here, though many manufacturers have been themselves looking to reduce dependence on China for their APIs and other essential inputs for manufacturing pharmaceuticals.
Automotive and engineering goods
Where India stands: The automotive sector has been a success for years, supported by an established component industry.
The gap: That success has been driven mainly by domestic production. About 25% of components made are exported but that is just about 4% of the total global trade, and India imports more components than it exports because production costs are higher than in rivals such as China.
What’s changing: Component makers are moving up the value chain by developing and owning the intellectual property (IP) for advanced parts, especially for electric vehicles (EVs).
Who’s driving it: Leading auto components makers like Sona Comstar and Bharat Forge are moving up the value chain by investing in R&D, partnering with leading foreign suppliers and even acquiring companies to gain expertise in the domain. Many have successfully shifted to the EV market by supplying advanced electronics and components that meet global standards.
Specialty Chemical Manufacturing
Where India stands: India is the sixth-largest chemical producer globally and meets most of its domestic demand. Its strengths lie in niches such as dyes, pigments and agrochemicals.
The gap: India holds just a 3–3.5% share of the global value chain, behind China and South Korea, and it lags in higher-value products. Low spending on research and development (R&D) and a fragmented industry that lacks scale hold it back.
What’s changing: The specialty segment is expanding quickly, moving into higher-value applications.
Who’s driving it: Navin Fluorine and Gujarat Fluorochemicals now make chemicals for lithium-ion battery packs, automotive coatings and semiconductors. Balaji Amines and Anupam Rasayan are producing solvents and chemicals for the agrochemical and pharmaceutical sectors.
What to watch next
The common thread across all four sectors is a move from assembling or importing towards owning more of the value chain. Progress will depend on how well PLI incentives convert into domestic component and ingredient capacity, whether R&D spending rises, and whether fragmented industries can reach scale.
