A tailored manufacturing strategy of incentives, research support, and investments targeting the 50 most imported products into the country will help India boost its manufacturing sector and add more jobs, Rajiv Memani, president of Confederation of Indian Industry (CII) and chairman of consultancy firm EY India, said in an interview.
Citing an internal study at the lobby group, Memani said that these intermediate products imported into India include electronics, components, energy transition equipment, and semiconductors.
Key to the success of this plan, Memani said, will be funding and pointed to sales of the government's stakes in public sector units as an option. If the Union government scales up its disinvestment programme to say, ₹2-3 trillion over the next two years, it will help to fund investments in infrastructure projects like high-speed rail and others that will help sharpen India's competitive advantage, he said.
The suggestions from the industry body come at a time the central government has just completed a winter session of Parliament that was marked with key legislations that aim at more investments in the nuclear power and insurance sectors—besides setting the context for the Union budget for FY27.
India’s economy expanded at 8.2% in the second quarter and is expected to grow at 7% or faster in the full year. Since 2011, India has been trying to raise the share of manufacturing in its economic output to 25% but has not succeeded. In FY25, the sector’s share in gross value added remained at 14%.
The government's disinvestment efforts have not kept with targets in recent times. In FY25, the Centre raised ₹33,000 crore, missing its disinvestment target of ₹50,000 crore. In the current financial year, the target is ₹47,000 crore. So far, it has been mobilized just ₹8,768 crore. With tax revenue buoyancy likely affected by rate cuts and nominal GDP growth likely to stay muted, disinvestment assumes significance as a source of revenue.
To add jobs, the extent of economic activity has to be scaled up, especially in labor-intensive sectors such as manufacturing and tourism, Memani stressed.
“It's also vital to address the skilling gap, implementing initiatives to make the workforce job-ready beyond just academic qualifications. A significant focus must be on manufacturing, developing a clear, product-led strategy for goods currently imported or insufficiently produced domestically, encompassing sectors like electronics, components, energy transition, electric vehicles (EVs), and semiconductors,” said Memani.
The goal, he said, is to scale up the domestic value creation and facilitate integration into global supply chains, actively promoting labor-intensive industries through Center-state partnerships and targeted schemes such as production linked incentive (PLI) schemes, Memani said.
Although India has had mixed success with its PLI schemes, it has worked well in electronics. In fiscal 2025, Apple assembled $22 billion worth of iPhones in India—up 60% from the previous year—raising India’s share in global iPhone production to 20%, according to a Bloomberg report. Apple’s pivot coincided with the Indian government’s push to scale up local manufacturing its PLI scheme for electronics. Following early success in electronics, the scheme received a higher budgetary allocation: ₹9,000 crore in FY26, up from ₹5,777 crore actual outlay in the previous year.
Memani also proposed that an inter-ministerial group could look into such a strategy.
A CII study identified the 50 top-level imports concentrated in eight to 10 HSN codes. HSN codes are globally used to identify goods in commerce and taxation. Memani said that these products often involve high technology, face challenges from global excess capacity or inadequate domestic demand, and require policy support and long-term demand planning.
The CII president also said that while India's growth in services is robust, the manufacturing sector faces some concerns; for example, there is still a need to streamline approvals, permits, environmental clearances, and inspections. “The government is working on this through decriminalization of laws, new labour codes, and reforms in construction permits and land regulations, but it's an ongoing process,” said Memani.
Also, economic efficiency and factor costs of production must be addressed to enhance competitiveness, Memani said, referring to the need for reforms in power distribution and strengthening transmission infrastructure. “Similarly, logistics costs can be lowered by increasing capacity at ports and airports, and expanding railway networks, including high-speed rail. Mining reforms are also critical here,” he said.
“The global manufacturing landscape sees a high concentration in one part of the world, often supported by significant government subsidies and strategic policies. To compete, India needs to foster technology partnerships, proactively support new companies, and identify demand,” Memani said.
The FY2027 Union budget should prioritize fiscal prudence while vigorously driving economic growth, he said.
Despite the strong real GDP growth, thanks to low inflation, leading to anticipated lower tax buoyancy, Memani said. “Therefore, a much greater and more concerted effort is needed on disinvestments and privatization, with bolder pronouncements to provide economic heft and generate revenue.”
Increased activity on the PPP, short for public-private partnerships, front and leveraging the National Monetization Pipeline are also crucial, Memani said. The pipeline lists assets that concessionaires can lease for a specific period of time under PPPs while ownership remains with the government.
Memani added that businesses expect the government to maintain significant capital expenditure of about ₹13-14 trillion in FY27. India's economic growth in the last few years has been sustained by government spending much more than private consumption or investment and exports.
This should be directed towards logistics infrastructure, such as high-speed rail, multimodal parks, and coastal economic zones, to spur manufacturing and reduce factor costs, he said.