Mains Practice Questions

Introduction: 

The National Manufacturing Mission (NMM), announced in the Union Budget 2025-26, aims to transform India’s manufacturing sector by improving business ease, developing a skilled workforce, supporting MSMEs, and encouraging clean tech manufacturing. 

Body: 

Potential Impact of the National Manufacturing Mission:

• Enhanced Global Competitiveness through Policy Support: The mission's focus on easing business regulations and offering policy assistance can attract investments to India's manufacturing sector. 
  • For example, the Production-Linked Incentive (PLI) scheme has already attracted significant investment in sectors like electronics, with companies like Foxconn and Wistron increasing their production capacities in India. 
• Building a Skilled Workforce for Industry 4.0: The mission’s emphasis on developing a future-ready workforce will provide the foundation for high-tech manufacturing. India's tech sector, especially in electronics, has seen growth due to similar upskilling initiatives. 
  • For instance, India’s semiconductor ecosystem is seeing a significant boost through initiatives like the Semicon India Programme which has earmarked ₹76,000 crore ($9 billion) to build chip manufacturing facilities.
• Support for MSMEs and Innovation: The mission’s special focus on MSMEs will help elevate their contribution to manufacturing. 
  • The increase in MSME credit guarantees from Rs 5 crore to Rs 10 crore will help these enterprises access the capital they need to scale operations and meet international standards.
  • Additionally, India’s PLI scheme for textiles has already spurred growth in the sector, showing the positive impact of targeted policy measures.

However, while it holds great potential, several challenges need addressing for it to effectively elevate India's manufacturing prowess on the global stage, like: 

• Logistics and Infrastructure Bottlenecks: Despite progress, India's logistics costs are significantly higher than global standards. 
  • According to the Economic Survey 2022-23, logistics costs in India stand at 14-18% of GDP, compared to around 8% in developed countries like the US and Germany. 
  • Delays at ports, as seen in Mumbai Port, impact timely deliveries, hindering India's ability to meet global demand competitively.
• Skill Gaps and Labor Challenges: India’s manufacturing sector faces a significant skills mismatch. 
  • According to the National Skill Development Corporation (NSDC), there is a shortfall of 29 million skilled workers in manufacturing sectors like AI-driven production and semiconductor fabrication. 
  • Programs like PMKVY (Pradhan Mantri Kaushal Vikas Yojana) aim to address this, but the gap remains vast. 

Dependence on Imports and Geopolitical Risks: India's heavy dependence on imports, especially from China, undermines its supply chain resilience. 

• For instance, India imports 70% of its Active Pharmaceutical Ingredients (API) from China. 
• Disruptions in global supply chains, like those seen during the US-China trade war, have highlighted India's vulnerability. 

Enhancing Global Competitiveness with National Manufacturing Mission:

• Focus on High-Tech Manufacturing: The NMM can enhance India’s global position by driving growth in high-tech industries like semiconductors, EVs, and renewable energy technologies. 
  • In the EV sector, India is already benefiting from initiatives like the FAME II scheme, which has led to significant investments from companies like Tesla and BYD.
• Integration into Global Supply Chains: By strengthening domestic production, especially in sectors like solar manufacturing and green hydrogen, India can reduce its reliance on imports and increase its export competitiveness. 
  • For example, the PLI scheme for solar manufacturing has already attracted investments from Indian Solar Manufacturers Association (ISMA), driving local production and reducing dependency on Chinese solar panels.
• Incentivizing Innovation through R&D: The NMM's focus on innovation and R&D can drive India’s competitiveness. 
  • A study by the World Intellectual Property Organization (WIPO) in 2023 showed that India’s patent filings in clean tech and electric vehicles have increased significantly, signaling growth in R&D.

Conclusion: 

Aligning this initiative with SDG 9: Industry, Innovation, and Infrastructure can pave the way for sustainable growth. As the Indian Prime Minister aptly put it, “Make in India, Make for the World”, this mission is a step towards positioning India as a global leader in manufacturing, driving both economic growth and global competitiveness.