NITI Aayog released a new report titled "Key Sectors to Position India as a Global Manufacturing Hub" on Thursday. It focuses on four sectors that can help India grow its manufacturing scale and become more competitive worldwide.
The study examined 62 sectors and narrowed them down to 12 based on attractiveness, strategic importance and value‑chain potential. The four highlighted sectors—chemicals, textiles, solar photovoltaic (PV) manufacturing and telecom equipment—have high import dependence and limited domestic value addition.
India is the world’s fifth‑largest manufacturer but accounts for only about 3 % of global output, worth $17.6 trillion. Manufacturing contributed 17.5 % of India’s GDP in FY26, while its share of gross value added (GVA) has hovered between 16–18 % for the past twenty years.
In telecom equipment, localisation is very low, especially for 4G and 5G radio access gear. Nearly 98 % of demand comes from private telecom operators, and the sector relies heavily on imported components.
The report urges the government to incentivise telecom operators to buy domestically produced equipment, especially radio infrastructure. It also recommends financial support for institute‑manufacturer partnerships to build VLSI semiconductor skills, and encourages joint ventures and IP‑led manufacturing.
India is the world’s second‑largest telecom market, with more than 1.2 billion subscribers, 85 % penetration and 75 % internet usage. The National Telecom Policy 2025 aims to double the sector’s GDP contribution, boost exports and create one million new jobs by 2030.
Solar PV manufacturing offers large growth prospects. India had 106 GW of installed capacity by March 2025 and needs an additional 174 GW to hit the 280 GW target in 2030. The domestic PV market is worth Rs 32,400 crore ($3.7 billion) and is expected to grow 17–20 % annually from FY23 to FY30.
However, the sector is heavily dependent on Chinese machinery and equipment, and Indian firms invest less than 1 % of revenue in R&D compared with a global average of 3 %. The report calls for a dedicated solar R&D fund, better access to national research grants, clean‑tech clusters and reduced reliance on China.
The chemicals sector suffers from import‑driven feedstock, limited port infrastructure and delays in developing Petroleum, Chemicals and Petrochemical Investment Regions (PCPIRs). Recommendations include boosting domestic feedstock production, promoting backward integration, establishing a PCPIR framework and upgrading ports.
Textiles remain a major employer, contributing 2 % to GDP, 11 % of manufacturing GVA and 9 % of exports, and supporting over 45 million jobs. About 80 % of the industry is made up of MSMEs, with fragmented clusters and lower productivity than China and Vietnam. The report suggests infrastructure and policy support for MSMEs, larger weaving capacities, improved market access through trade agreements and reforms to the inverted duty structure on man‑made fibres.
Across all four sectors, NITI Aayog stresses the need for long‑term policy consistency, industrial clusters, investment in technology and skills, stronger links with global markets, and close coordination among government, industry, academia and finance to achieve sustained growth.