India Shifts to Tech-Led Manufacturing; 5 Key Sectors Identified to Drive $3 Trillion Goal

India's new strategy for domestic manufacturing will increase this sector's contribution to the country's GDP to 25% by 2047, up from around 17% currently. With this new strategy, India will become a global manufacturing powerhouse by 2047. A report by Boston Consulting Group (BCG) and venture capital firm Z47 states that India's manufacturing strategy is shifting from assembly-based development to technology-based value creation. The report identifies five high-priority sectors that can significantly contribute to India's transformation into a $3 trillion developed economy by 2047. These sectors are electronics and semiconductors, defense, energy, pharmaceuticals, and automotive and electric vehicles.

The report states that these sectors combine strong growth, industry incentives, and clear policy/investment plans. This is consistent to increase the share of manufacturing in the domestic economy to approximately 25% by 2047. Semiconductor demand in India is projected to grow from $33 billion in 2022 to $117 billion by 2030. Electronics manufacturing has increased. Today, 99.2% of smartphones sold are made in India, up from 26% a decade ago. Rising global tensions have made the country's defense sector a top strategic priority. The defense budget has doubled to ₹6.81 lakh crore in 10 years, leading to a decline in imports.

In the defense sector, 92% of contracts in 2024-25 will be awarded to the domestic industry. Indigenous platforms such as Tejas, Prachanda, and INS Vikrant demonstrate capabilities. The auto industry contributes 7.1% to GDP and is a key pillar of manufacturing. Adoption of electric vehicles has increased, with sales projected to increase from 50,000 in 2016 to 2 million in 2024.

India will see a record 29.5 GW of renewable energy installed in 2024-25, bringing total renewable energy to 220 GW. India may require 50-70 GWh of battery capacity annually in the future, creating manufacturing opportunities in various sectors, including cells, materials, and recycling.

Supplier of 60% of global vaccines...The pharmaceutical sector remains strong. India supplies 20% of global generic medicines and 60% of global vaccines. There is high import dependence on APIs and key starting materials, reaching 60-70% for critical molecules, posing risks.