Pivoting Indian manufacturing policy differently

Abstract

Indian manufacturing has been receiving considerable attention for its weak performance and its inability to generate desired employment. India has set a target of increasing manufacturing’s contribution to GDP significantly. What will it take to make India a global manufacturing hub? While inadequacies in infrastructure, utilities, labor laws, and practices that govern doing business are generally cited as barriers to growth in manufacturing, in this article we argue that manufacturing policy needs substantive transformation to even take advantage of existing resources.We address three debates in Indian manufacturing: volume versus variety, manual versus capital intensive, and low tech versus hi-tech production that have created a misalignment between capabilities and strategies. We present a framework for thinking of transformation of manufacturing policy by focusing on a new set of enabling factors that will align strategies and help build long-term dynamic capabilities that are essential for growth of manufacturing in India.