National Manufacturing Mission

The National Manufacturing Mission (NMM) represents a landmark initiative by the Government of India aimed at revitalising the country’s industrial base, enhancing competitiveness, and positioning India as a leading participant in global value chains. Announced as part of the Union Budget for FY2025–26, the mission is a cornerstone of the broader Make in India initiative and is aligned with India’s long-term vision of achieving a manufacturing-led economic transformation. The mission now includes a significant financial outlay of ₹10,000 crore to support greenfield projects, incentivise high-value sectors, and strengthen regional manufacturing clusters.

Background and Objectives

India’s manufacturing sector currently contributes approximately 13–17% of the national Gross Domestic Product (GDP). The National Manufacturing Mission aims to raise this share to 25% by 2035, thereby supporting employment generation and sustainable growth. The mission was initially allocated ₹100 crore under the 2024 plan but has since been expanded substantially to meet ambitious national objectives.
The mission’s overarching goals include:

• Simplifying the processes of doing business by reducing regulatory and cost burdens.
• Creating a future-ready workforce through targeted skill development programmes.
• Strengthening the Micro, Small, and Medium Enterprises (MSME) sector, which constitutes the backbone of India’s industrial ecosystem.
• Promoting access to advanced technology and global knowledge-sharing partnerships.
• Enhancing the quality and competitiveness of Indian products in both domestic and international markets.

The NMM’s policy framework provides strategic oversight, ensuring that ministries and state governments remain coordinated and aligned towards shared industrial objectives.

Governance and Institutional Framework

A dedicated inter-ministerial committee comprising the NITI Aayog, Department for Promotion of Industry and Internal Trade (DPIIT), and the ministries of electronics, steel, heavy industries, and renewable energy is tasked with drafting and implementing the mission’s framework. This structure is designed to facilitate viability gap funding (VGF) and other fiscal incentives to attract investments in priority sectors.
The NMM functions as a coordinating body rather than a replacement for existing departments. It provides policy support, execution roadmaps, and governance mechanisms that enable both central and state administrations to collaborate effectively.

Focus on Green Manufacturing and Emerging Sectors

A defining feature of the NMM is its emphasis on clean technology and green manufacturing. The mission seeks to enhance domestic capacity in critical areas such as:

• Solar photovoltaic (PV) cells and modules
• Electric vehicle (EV) batteries, motors, and controllers
• Electrolysers for green hydrogen
• Wind turbines and grid-scale energy storage systems
• High-voltage transmission equipment

These initiatives are intended to support India’s climate commitments and promote a low-carbon industrial transition, thereby attracting foreign investment and technology collaborations.

Seven-Region Cluster Approach

To promote decentralised and region-specific industrial growth, the government has mapped seven regional manufacturing clusters, each leveraging unique local strengths:

• Southwest (Bengaluru–Chennai region): Focused on high-tech industries such as semiconductors and aerospace.
• Northwest (Delhi–NCR, Punjab, Haryana): Concentrating on electric vehicles, consumer durables, and food products.
• North Central (Agra, Prayagraj): Dedicated to automotive spare parts, leather goods, and non-metallic products.
• Northeast (Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura): Targeting pharmaceuticals and botanical products.
• West (Gujarat, Maharashtra): Emphasising capital goods, electronics, and pharmaceuticals.
• East (West Bengal): Developing basic metal industries including iron and steel.
• South (Tiruppur, Hosur): Concentrating on automotive components, electronics, and capital goods.

This cluster-based model aims to reduce costs, enhance efficiency, and enable economies of scale by co-locating suppliers, manufacturers, and research institutions.

Policy Measures to Support MSMEs and Employment

The mission acknowledges the pivotal role of India’s 66 million MSMEs in industrial development. Key measures include:

• Expansion of the Focus Product Scheme for sectors such as footwear, leather, and textiles to increase productivity and exports.
• Skill development initiatives tailored to industry needs through partnerships with technical institutions and industrial training centres.
• Infrastructure improvement within clusters to ensure ease of logistics, access to ports, and quality assurance facilities within cluster boundaries.

Integration with Global Trade and Tariff Reforms

The NMM is strategically aligned with a forthcoming India–US trade deal expected to ease tariff barriers. The United States had previously imposed a 50% tariff on Indian goods due to geopolitical concerns; however, under the proposed agreement, tariffs are likely to be reduced to 15–16%, significantly enhancing India’s export competitiveness.
This shift positions Indian manufacturers favourably against regional competitors such as Japan (15%), Vietnam (20%), and Indonesia (19%), opening new avenues for global trade and investment. The mission therefore seeks to integrate India more deeply into international value chains, facilitating knowledge transfer and innovation partnerships.

Technology Partnerships and Quality Enhancement

Experts emphasise that technology partnerships and global tie-ups are critical for long-term manufacturing success. India is encouraged to emulate successful industrial models such as Germany’s focus on precision manufacturing and international collaboration.
Quality assurance, intellectual property facilitation, and research and development (R&D) within clusters are seen as key enablers of sustainable competitiveness. To support this, the government plans to establish testing centres, innovation hubs, and common R&D facilities within the identified clusters.

Initiatives in the Toy and Food Processing Sectors

In addition to high-technology and green manufacturing, the NMM continues to support labour-intensive industries through the National Action Plan for Toys, aimed at establishing India as a global toy manufacturing hub. The plan focuses on innovation, local sourcing, and the development of toy clusters.
In the food processing sector, the mission includes the establishment of a National Institute of Food Technology, Entrepreneurship and Management (NIFTEM) in Bihar. This institute aims to enhance value addition in agriculture, support rural entrepreneurship, and create employment for the youth.

Significance and Long-Term Outlook

According to World Bank data, India’s current share in global manufacturing output stands at 2.9%, compared to China’s 31.6%. The National Manufacturing Mission seeks to close this gap by identifying 15 priority sectors, boosting MSME productivity, and embedding India more firmly within global supply networks.