NITI Aayog has identified four priority sectors — chemicals, textiles, telecom and networking equipment, solar photovoltaic manufacturing — as integral to India becoming a global hub for manufacturing. These industries, the report explains, have the potential to enhance domestic value addition, reduce import dependence and increase India’s international competitiveness.
The analysis is described in the first volume of NITI Aayog’s report, “Key Sectors for Making India a Manufacturing Hub.” The research draws upon an established framework focusing on four criteria, including market potential, job creation and strategic importance, across 62 sectors to identify shortlisted industries.
Chemicals shows out as having high potential because it feeds into a number of downstream industries including petrochemicals, specialty chemicals and inorganic chemicals, the report says. If strengthened, this area could help broaden industrial value chains and mitigate the over-reliance on imports.
Textiles were chosen because they are both labour intensive and exportable. NITI Aayog written some points in one of their previous letters: The sector should be competitive, by improving access to raw materials and infrastructure support and integrating with the global trade more deeply.
The inclusion of the telecom and networking equipment segment is on the premise that India has a chance to enhance indigenisation as well as local manufacturing and domestic component production. A portion of the report states that deeper localisation can enhance India’s stature in a segment that’s a key pillar to any digital architecture.
SI also found the relevance of solar PV manufacturing as a key area for strategic growth because of its importance to clean energy and for domestic industrial self-reliance. According to NITI Aayog, the sector can benefit from enhancing upstream capabilities and lowering dependence on imports.
That report comes amid a manufacturing sector that has failed to claim much of a larger part of India’s economy for several years. NITI Aayog says that India must now seize scale, depth of technology and integration with global supply chains and export competitiveness, not just production.
The initial report marks only the first phase of a wider roadmap for industrial policy to come, with reports on eight more sectors expected to follow.