When the ‘Make in India’ initiative was launched in 2014, its ambition was clear: to position India as a global manufacturing destination, attract investment, generate employment and strengthen domestic industrial capabilities. More than a decade later, that ambition has matured. The question is no longer only whether India can manufacture competitively. It is whether India can become indispensable to the world’s industrial future. That distinction defines the next phase of ‘Make in India’.

The global manufacturing order is undergoing its most significant realignment in decades. Geopolitical shifts, supply-chain diversification, the transition towards clean energy, advances in artificial intelligence and a renewed focus on economic resilience are compelling businesses to rethink where products are designed, manufactured and sourced. Increasingly, manufacturing decisions are no longer driven by cost alone; they are shaped by trust, stability, technological capability and long-term strategic partnerships.

India enters this moment with considerable strengths

It offers one of the world’s largest domestic markets, a rapidly expanding infrastructure network, a deep engineering talent pool, a thriving digital ecosystem and policy support aimed at strengthening industrial competitiveness. Collectively, these advantages have positioned the country not merely as an alternative manufacturing destination, but as an increasingly important partner in global value chains.

Encouragingly, the foundations are already becoming visible. According to the Economic Survey 2025–26, manufacturing Gross Value Added recorded year-on-year growth of 7.72% in the first quarter and 9.13% in the second quarter of FY2025–26. This performance has coincided with a gradual move towards higher-value manufacturing segments, improved availability of industrial infrastructure through corridor-led development and greater adoption of technology and formalisation across firms. Yet the true significance of this progress lies beyond production numbers.

The first decade of ‘Make in India’ focused on building manufacturing capacity. The decade ahead should focus on building manufacturing capability. Capacity creates output. Capability creates competitive advantage.

Moving beyond assembly

It is capability that enables industries to move beyond assembly and into advanced engineering, product design, intellectual property creation, precision manufacturing and globally recognised innovation. In an increasingly knowledge-driven economy, the value of manufacturing will be measured not simply by the number of products produced, but by the ideas, technologies and expertise embedded within them.

This shift is already evident across several sectors

Electronics, pharmaceuticals, defence manufacturing, aerospace, renewable-energy equipment, electric mobility, semiconductors and medical devices represent strategic industries in which India is expanding production, investment or technological capability.

The Production Linked Incentive programme has played an important role in accelerating this transition. As of 31 December 2025, PLI schemes across 14 sectors had attracted investments exceeding ₹2.16 lakh crore, generated cumulative production or sales of over ₹20.41 lakh crore and supported exports of over ₹8.3 lakh crore.

These initiatives have supported investment and production expansion across targeted sectors, while encouraging companies to deepen domestic value chains, invest in local supplier ecosystems and expand high-value manufacturing within the country.

India’s electronics industry best illustrates this transition

The country has rapidly emerged as the world’s second-largest mobile-phone manufacturing country and a major smartphone-manufacturing hub. More significantly, policy and industry attention is increasingly shifting from assembling finished products towards increasing domestic component manufacturing, expanding supplier networks and enhancing local value addition. This represents a fundamental shift in industrial capability rather than simply an increase in production volumes.

Manufacturing competitiveness beyond factories

However, the next phase of ‘Make in India’ will not be defined by factories alone. Manufacturing competitiveness today depends equally on logistics efficiency, digital infrastructure, research ecosystems, skilled talent, access to capital, resilient supplier networks and seamless integration with global markets.

Technology will be another defining force. Artificial intelligence, robotics, automation, digital twins, predictive maintenance and advanced analytics are fundamentally reshaping modern manufacturing. The factories of tomorrow will not simply produce more; they will produce smarter, with greater precision, flexibility, efficiency and sustainability. Success will increasingly depend on how effectively manufacturers combine physical production with digital intelligence.

Equally important is India’s innovation ecosystem. The future of manufacturing will belong to economies that do not merely produce products but also design them, engineer them and continuously improve them. The transition from ‘Make in India’ to ‘Designed and Engineered in India’ represents perhaps the country’s most significant long-term opportunity. Building stronger research capabilities, encouraging industry–academia collaboration, supporting deep-tech innovation and expanding investments in intellectual property will be central to this ambition.

Sustainability as a competitive advantage

Global markets increasingly expect manufacturers to demonstrate responsible sourcing, lower carbon intensity, circular production models and transparent supply chains. As India expands investments in renewable energy, green hydrogen, resource-efficient manufacturing and clean technologies, sustainability is evolving from a compliance requirement into a competitive advantage.

While the opportunity is immense, sustaining this momentum will require continued focus on improving productivity, strengthening MSMEs, investing in workforce skills, accelerating technology adoption and enhancing research and development.

India must also continue addressing uneven logistics performance, the cost and reliability of industrial power, gaps in workforce readiness, limited research intensity and the ability of smaller suppliers to meet global quality standards. Manufacturing leadership is not built through policy alone; it is built through continuous innovation, execution and collaboration across industry, academia and government.

Becoming a trusted partner

The next phase of ‘Make in India’ is therefore not about becoming the world’s factory. It is about becoming one of the world’s most trusted manufacturing and innovation partners.

Success will not be measured solely by higher production or larger factories. It will be measured by India’s ability to create globally competitive technologies, resilient supply chains, high-value exports, skilled employment and enduring industrial institutions. The future of manufacturing will belong to economies that combine scale with sophistication, resilience with innovation and ambition with execution.

India’s next manufacturing journey is not simply about making more products. It is about creating products, technologies and industrial capabilities that the world increasingly chooses to trust.

Disclaimer: The views expressed in this article are those of the author/authors and do not necessarily reflect the views of ET Edge Insights, its management, or its members.