Can India turn its manufacturing push into a lasting global advantage?
India’s share of global merchandise exports has stayed under 2 percent for decades, through every reform and every slogan.
By Sunil K Dalal
The world has decided India is a manufacturing story. Investment is arriving, supply chains are moving toward us and the ambition is now official. The National Manufacturing Mission wants manufacturing to reach a quarter of our GDP by 2035, carrying merchandise exports past a trillion dollars. Today that share sits at roughly 16 – 17 percent of the GDP. The distance between those two numbers is the whole task.
But I have seen this film before. Over a working lifetime building engineering businesses, I watched India compete on cost, on volume, and on scale. Sometimes it worked but it didn’t always last. The reasons were always the same. Growing fast doesn’t mean you’re leading. Being big doesn’t mean you’re strong. And being cheaper doesn’t give you a lasting advantage.
The record is plain. India’s share of global merchandise exports has stayed under 2 percent for decades, through every reform and every slogan. And where we did win on price, we did not keep it. The World Bank has noted that in labour-intensive exports like apparel and textiles, smaller rivals such as Bangladesh and Vietnam moved ahead of us. That is what a cost advantage does. It rises, and then it leaves for whoever is hungrier.
Engineering depth behaves differently. It is the accumulated ability to solve hard problems. To design, not just assemble. To improve a product, not just reproduce it. Depth does not move to the next cheap country. It stays. A team that has solved a difficult problem once can solve a harder one next. That is the advantage that outlasts every cost cycle.
The factory now runs on knowledge
The nature of manufacturing has changed. A modern plant runs on information as much as on machinery. The intent is clearly there. In PwC’s latest survey of Indian manufacturers, 59 percent said AI will be significant to their strategic goals within five years. Globally, that number is at 52 percent. On paper, that would mean that we are more ambitious than our peers.
But ambition is not capability. The same research found a gap between what firms intend to invest and how they actually operate. Belief in technology runs high. Coherent integration of it does not. And that gap is exactly where leadership will be decided. The plants that treat data as core will pull away. The ones that treat it as optional will fall behind quietly at first, and then all at once.
I also think this is where innovation is misunderstood. There is a habit of treating it as a separate function. Many Indian manufacturers now say product design and development will see their largest rise in investment. Far fewer have made it the centre of how the company actually thinks. Innovation is the outcome of deep knowledge. It comes from engineers who understand a problem so well that a better answer becomes obvious to them. That understanding takes years. It is worth every one of them.
Which is why the deepest infrastructure a manufacturing nation has is not its corridors or its ports. It is its engineers. A skilled, curious, well trained workforce is not a support system for industry. It is the industry. If we want factories that think, we need people who are taught to think.
The choice we make now
India has the demand, the ambition, and the moment. What it has to decide is what kind of manufacturing power it wants to be. We can be a supplier of scale. Useful, replaceable, always negotiating on price. Or we can be a partner in innovation. Harder to build, and far harder to replace.
I know which one lasts. I have spent a career watching the difference play out. The businesses that invested in engineering, in people, and in real capability were still standing when the cost advantage moved on.
The window is open and the momentum has given us the start. Now, engineering will decide whether we lead.