Key Details
The report, Key Sectors to Position India as a Global Manufacturing Hub—Volume I, prepared by CRISIL Intelligence with financial assistance under NITI Aayog’s Research Scheme, assessed 62 manufacturing sectors and shortlisted 12 with high potential. Its first volume examines chemicals, textiles, telecom and network equipment, and solar PV manufacturing.
Sector | Existing strength | Critical constraint | Strategic direction |
|---|---|---|---|
Chemicals | $200–220 billion domestic industry in FY2025 | Import dependence on feedstock and insufficient downstream integration | Develop integrated chemical hubs and support higher-value derivatives |
Textiles | 45 million jobs and $37.7 billion of exports in FY2025 | Fragmented production, low productivity and overreliance on cotton | Build scale in man-made fibres, modernise MSMEs and improve market access |
Telecom equipment | $25 billion market expected to reach $50 billion by FY2032 | Localisation below 15% in several products and dependence on imported components | Link incentives to domestic value addition, technology transfer and component manufacturing |
Solar PV | Module capacity reached 100 GW by August 2025 | Nearly complete dependence on imported polysilicon and over 90% dependence on wafers | Expand upstream manufacturing, R&D and export-market diversification |
Four Sectors Open a Wider Manufacturing Roadmap
The report examines chemicals, textiles, telecom equipment and solar PV as the first four of 12 priority sectors in India’s ambition to become a global manufacturing hub by 2047.
Its central argument is that expanding production capacity is not enough. Competitiveness will depend on increasing domestic value addition, reducing dependence on critical imported inputs and strengthening India’s position across production chains.
Each Sector Faces a Different Upgrading Challenge
Chemicals: India’s $200–220 billion industry supplies inputs across manufacturing, but feedstock shortages and limited production of complex downstream chemicals constrain value addition. The report proposes integrated chemical hubs, shared infrastructure and support for critical inputs.
Textiles: The sector employs more than 45 million people, but India accounts for only 4.1% of global textile and apparel exports. Greater competitiveness in man-made fibres, technical textiles and value-added garments will require addressing fragmented production and low productivity.
Telecom equipment: Domestic demand has expanded faster than manufacturing depth. Localisation remains below 15% for several products, with continued dependence on imported components. Priorities include domestic-component incentives, joint ventures, technology transfer and common testing facilities.
Solar PV: Cell and module capacity has expanded, but India remains almost entirely dependent on imported polysilicon and more than 90% dependent on imported wafers. The next step is deeper upstream manufacturing, domestic technology development and diversified sources of machinery and materials.
Policy Must Target Manufacturing Depth, Not Capacity Alone
Across the four sectors, the report identifies several common priorities:
link incentives more closely to domestic value addition;
develop integrated industrial clusters with infrastructure, logistics, testing and common facilities;
strengthen industry-led R&D, technology transfer and workforce development;
help MSMEs upgrade and integrate into larger production networks; and
diversify export markets and supply sources.
What Is Domestic Value Addition? It is the share of a product’s value created domestically through materials, components, design, technology and manufacturing. Domestic assembly can therefore coexist with low value addition when critical inputs remain imported.
The challenge differs by sector: feedstock and downstream production in chemicals; scale and productivity in textiles; and components, technology and R&D in telecom equipment and solar PV.
Policy Relevance
PLI outcomes should be judged by value added, not capacity announced. Monitoring should distinguish domestic design and component production from assembly based substantially on imported inputs.
Sectoral clusters need operational authority. Chemical parks, textile clusters, telecom zones and solar hubs will deliver scale only if land, utilities, testing, logistics and approvals are coordinated at the project level.
Export growth requires market diversification. Heavy reliance on one destination — as seen in solar PV — can convert rapid export growth into a new source of vulnerability.
Technology policy and manufacturing policy must operate together. Joint ventures, domestic R&D, testing infrastructure and industry-academia partnerships will determine whether firms move into higher-value segments.
The four sectors require different policy instruments. A common manufacturing ambition should not translate into identical incentives for feedstock-intensive chemicals, employment-intensive textiles and technology-intensive telecom or solar manufacturing.
Follow the Full Report Here: Key Sectors to Position India as a Global Manufacturing Hub—Volume I