India’s effort to become a global factory has produced headlines, incentives and isolated wins, yet the structural transformation many economists expected remains incomplete. Manufacturing contributes roughly one‑sixth of gross domestic product and has struggled to absorb millions of workers moving out of agriculture. The result is a persistent jobs shortfall and continued dependence on services and low‑productivity informal industry for employment.

A recent column in the Hindustan Times’ Number Theory series noted that while policy instruments such as Production Linked Incentive schemes and preferential sourcing have attracted investment into select sectors, the aggregate story is unchanged: the industrial base is fragmented, firms are small, and productivity lags peer economies. Data from national accounts and employment surveys point to a dual economy where a handful of export‑oriented plants sit alongside millions of micro and informal manufacturers that lack scale, technology and access to capital.

“Policy carrots have succeeded at the margins, but they haven’t reshaped the underlying ecosystem,” said an industry executive in Bengaluru. “Global buyers want reliable suppliers with predictable compliance, scale and logistics — that’s where India still falls short compared with competitors.”

Global dynamics offer a window of opportunity. Geopolitical tensions and firms pursuing a “China‑plus‑one” strategy have created openings in electronics, pharmaceuticals and auto components. Foreign direct investment has trended upward in recent years, and several states have promoted industrial corridors and land parcels to attract anchor firms. Yet attracting blue‑chip investment has not automatically created dense supplier networks or steady job creation in towns beyond a handful of hubs.

Analysts trace the bottlenecks to a combination of factors. Logistics costs and port congestion raise the effective price of Indian goods; land acquisition and utilities pose delays and unpredictability; access to long‑term debt and patient capital remains limited for mid‑sized manufacturers; and the vocational training pipeline does not supply the technicians and supervisors needed for modern lines. Environmental compliance and the need for cleaner, energy‑efficient plants add another layer of both cost and long‑term benefit.

Policy responses to date have blended subsidies, tax incentives and targeted schemes to push upstream manufacturing. But experts argue that systemic reforms are the missing ingredient — streamlined regulations at the state level, better linkages between anchor firms and local suppliers, strengthened vocational training, and an easier financing environment that enables consolidation and scale. “You need industrial ecosystems, not just headline investments,” a labor economist said. “That requires patient coordination across infrastructure, education and finance.”

The stakes extend beyond GDP. Successful scaling of manufacturing would create tens of millions of stable, formal jobs, boost exports and reduce import dependence for strategic intermediates. It would also shape India’s emissions pathway: a faster industrial rise must be paired with green technologies to avoid carbon‑intensive lock‑in.

As the world’s supply chains continue to realign, India faces a pivotal choice: leverage the opportunity with reforms that create durable, scalable manufacturing clusters, or see investment flow into competitors with deeper supplier networks and simpler logistics. For policymakers and industry alike, the challenge is moving beyond incentives to the harder work of building an ecosystem that produces jobs at scale.