Subject: Economy | Published: 12 November 2025
Make in India 2.0: turbocharging India's manufacturing dream with pli schemes
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From Global Blueprint to Actionable Strategy: The New Avatar of ‘Make in India’
Launched on September 25, 2014, the Make in India initiative was a clarion call to the world. Symbolized by a striding lion made of cogs, it envisioned transforming India from a services-led economy into a global manufacturing and design powerhouse. The initial objectives were ambitious: increase the manufacturing sector’s contribution to 25% of the GDP and create 100 million additional jobs by 2022 (later revised to 2025).
While the first phase succeeded in improving the Ease of Doing Business (India jumped to 63rd place in the World Bank’s 2020 report) and attracting significant Foreign Direct Investment (FDI), the policy has undergone a crucial evolution. Today, the conversation is dominated by ‘Make in India 2.0’ and its most potent tool: the Production-Linked Incentive (PLI) Schemes. This marks a strategic shift from broad promotion to targeted, result-oriented execution.
Analogy: The Four-Wheeled Drive: Think of the ‘Make in India’ initiative as a powerful vehicle designed to drive industrial growth. Its four pillars act as its essential components: New Processes (the streamlined engine), New Infrastructure (the sturdy chassis), New Sectors (the high-traction wheels), and a New Mindset (the skilled driver at the helm).
The Four Pillars: Foundation of Industrial Growth
The initiative is built upon a foundational framework of four key pillars, designed to create a conducive ecosystem for manufacturing.
| Pillar | Core Objective | Examples of Implementation |
|---|---|---|
| New Processes | Improve the Ease of Doing Business | Reducing compliances (over 40,000 reduced), decriminalizing provisions, and implementing the Goods and Services Tax (GST). |
| New Infrastructure | Build world-class, modern infrastructure | Development of industrial corridors, smart cities, and the National Infrastructure Pipeline (NIP). |
| New Sectors | Open new areas for investment and development | Liberalizing FDI norms in sectors like defence, space, and railways. Make in India 2.0 now focuses on 27 key sectors. |
| New Mindset | Shift the role of government from regulator to facilitator | Creation of agencies like Invest India as a single point of contact for investors. |
Mnemonic for the Four Pillars: To easily remember the four pillars, think of the phrase “People Invest Successfully Now” (Processes, Infrastructure, Sectors, New Mindset).
The Game Changer: ‘Make in India 2.0’ and the PLI Scheme Revolution
The contemporary focus of India’s manufacturing policy is Make in India 2.0. This refined strategy narrows the focus to 27 key sectors—15 in manufacturing and 12 in services—coordinated by the Department for Promotion of Industry and Internal Trade (DPIIT) and the Department of Commerce, respectively.
At the heart of this new phase is the Production-Linked Incentive (PLI) Scheme, introduced in 2020. The PLI scheme is not just a subsidy; it’s a strategic incentive mechanism that rewards companies for incremental production and sales. This output-oriented approach has been transformative.
Recent Successes (2023-2025):
- Massive Investment: As of August 2024, the PLI schemes for 14 key sectors have attracted investments worth ₹1.46 lakh crore ($17.5 billion).
- Production Surge: This investment has resulted in production and sales worth over ₹12.50 lakh crore ($150 billion).
- Electronics Manufacturing Hub: The electronics sector, particularly mobile phone manufacturing, has been a stellar success. India is now the world’s second-largest mobile phone manufacturer, with 99% of phones sold in the country being produced domestically. The PLI scheme has been instrumental in attracting global giants like Apple to scale up production in India.
- New Frontiers (2024-2025): In early 2024, the government approved the construction of three new semiconductor plants with investments exceeding ₹1.3 lakh crore ($15 billion), signaling a major push into high-tech manufacturing.
Captivating Statistic: According to the Annual Survey of Industries (ASI), India’s manufacturing sector’s Gross Value Added (GVA) clocked an impressive growth of 11.89% in FY24. This robust performance has helped add over 5.7 million manufacturing jobs in the last decade.
Critical Policy Appraisal
Despite significant strides, the journey is not without its challenges. A balanced view is crucial for UPSC aspirants.
| Challenges/Criticisms | Opportunities/Successes/Way Forward |
|---|---|
| Stagnant GDP Share: The manufacturing sector’s share of GDP has hovered around 17%, still far from the 25% target. | PLI Success: The PLI scheme has proven to be a highly effective tool. Expanding it to more sectors like toys and leather could yield further gains. |
| High Logistics Costs: At 13-14% of GDP, India’s logistics costs are significantly higher than the global average of 8-9%, impacting competitiveness. | Geopolitical Tailwinds: The global ‘China Plus One’ strategy presents a historic opportunity for India to integrate into global supply chains. |
| Job Quality & Mismatch: While jobs have been created, concerns remain about the quality of employment and the need for a highly skilled workforce for advanced manufacturing. | Demographic Dividend: A young, vast workforce is India’s greatest asset. Initiatives like Skill India must be aligned with the needs of Industry 4.0. |
| Competition & R&D: Domestic R&D spending remains below 1% of GDP, and Indian firms face stiff competition from established global players. | Startup Ecosystem: The thriving startup ecosystem, nurtured by Startup India, can be a source of immense innovation for the manufacturing sector. |
Fun Fact: The Startup India initiative, a key enabler for ‘Make in India’, has led to the recognition of over 1.49 lakh startups, which have collectively created over 1.6 million direct jobs as of 2024.
Analytical Lens: UPSC Focus (Mains & Prelims)
Conceptual Basis: The ‘Make in India’ initiative is a flagship policy program of the Government of India, spearheaded by the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry. It builds upon the framework laid out by the National Manufacturing Policy, 2011, but with a renewed focus on execution and investment facilitation.
UPSC Integration: Connecting the Dots
- GS Paper 3 (Indian Economy): Directly links to topics like Industrial Policy, Investment Models, Infrastructure, Employment, and changes in economic policy. The performance of PLI schemes is a crucial area.
- GS Paper 2 (Governance & International Relations): Connects to Ease of Doing Business reforms, Centre-State relations (land, labor), and India’s foreign policy objectives of attracting FDI and positioning itself as a reliable partner in global supply chains.
- GS Paper 1 (Social Issues): Relates to urbanization (smart cities), skill development, and the demographic dividend, analyzing how industrial growth impacts social structures and migration patterns.
Future Impact & Policy Relevance: ‘Make in India’ is not merely an economic policy; it is central to India’s ambition of becoming ‘Viksit Bharat’ (Developed India) by 2047. Its success is critical for absorbing the millions of young people entering the workforce, reducing import dependency in strategic sectors (like defence and pharmaceuticals), and enhancing national security. The current emphasis on high-tech manufacturing, such as semiconductors and renewable energy components, will determine India’s competitiveness and strategic autonomy in the coming decades. The policy’s ability to navigate global trade dynamics, address domestic infrastructure gaps, and foster a culture of innovation will be its ultimate test.
Prelims Practice MCQ:
Which of the following are the officially stated ‘Four Pillars’ of the ‘Make in India’ initiative?
- New Processes
- New Infrastructure
- New FDI Policy
- New Sectors
- New Mindset
Select the correct answer using the code given below: (a) 1, 2, 3 and 4 only (b) 1, 2, 4 and 5 only (c) 2, 3, 4 and 5 only (d) 1, 2, 3, 4 and 5
Answer: (b) 1, 2, 4 and 5 only Explanation: The four official pillars of the Make in India initiative are New Processes, New Infrastructure, New Sectors, and New Mindset. ‘New FDI Policy’ is a tool used within the ‘New Processes’ and ‘New Sectors’ pillars but is not a standalone pillar itself.
Mains Sample Question (15 Marks):
The Production-Linked Incentive (PLI) scheme represents a paradigm shift in India’s industrial policy from broad incentives to targeted, output-based support. Critically evaluate the performance of the PLI schemes in transforming India into a globally competitive manufacturing hub. What persistent challenges need to be addressed to maximize its impact?
Mind Map Outline (Revision Structure)
- Make in India Initiative
- Core Vision & Launch
- Launch Date: September 25, 2014
- Symbol: Striding Lion of Cogs
- Primary Objectives
- Increase Manufacturing Share to 25% of GDP
- Create 100 Million Additional Jobs
- The Four Pillars (PISN)
- Processes: Ease of Doing Business, GST, Deregulation
- Infrastructure: Industrial Corridors, Smart Cities, NIP
- Sectors: Opening FDI, Focus on 27 sectors in Phase 2.0
- New Mindset: Government as a facilitator, Invest India agency
- Evolution: Make in India 2.0 & PLI Scheme
- Shift in Strategy: From broad promotion to targeted execution
- Production-Linked Incentive (PLI) Scheme
- Mechanism: Incentive on incremental sales/production
- Key Sectors (14): Electronics, Pharma, Auto, etc.
- Recent Performance (2023-2025 Data)
- Investment Attracted: ~₹1.46 lakh crore
- Production Generated: ~₹12.50 lakh crore
- Success Story: Mobile Phone Manufacturing
- New Push: Semiconductors
- Critical Appraisal
- Challenges
- Stagnant GDP Share (~17%)
- High Logistics Costs
- Skill Gaps & R&D Deficit
- Opportunities
- Global Supply Chain Diversification (China+1)
- Demographic Dividend
- Thriving Startup Ecosystem (Startup India)
- Challenges
- UPSC Analytical Framework
- Nodal Agency: DPIIT, Ministry of Commerce and Industry
- Inter-Topic Linkages
- Economy (GS3): Industrial Policy, FDI
- Governance & IR (GS2): EoDB, Global Supply Chains
- Future Relevance: ‘Viksit Bharat 2047’, Strategic Autonomy
- Core Vision & Launch