Even after a decade of Make in India, India’s manufacturing sector has remained a weak spot in its growth story. How can India fundamentally reset its manufacturing sector to utilise its potential in GDP growth and job creation?

Factor Market constraint (e.g. labour laws) 2. Missing Middle 3. High logistic cost (>13% of GDP) 4. Policy constraint 5. Lack of Economies of Scale

Ways to fundamentally reset

1. Reform in factor market (e.g. Implementing New Labour codes)
2. Cluster based approach for manufacturing (e.g. Industrial corridor)

③ focus on labour intensive manufacturing eg Textile [HO Model → comperative advantage]

④ Shift from "Build to print" to "Build to design" (Smiley curve of Raghuram Rajan)

diagram Smiley curve showing a U-shape

• Axis: value
• Points: design (left), print (right)

⑤ Special focus on MSME → ES 2024 : Shift from size based to age based incentive for solving missing middle.

⑥ Integrating with GVC → more FTAs, RTAs.

⑦ Leveraging China + 1 opportunity

⑧ Servification of manufactured Output (Higher value addition)