Sunrise Sector Strategy for Boosting India’s Manufacturing

GS3 – IE

Context:

The Finance Minister has outlined a vision to expand the manufacturing sector’s contribution to India’s GDP from the current 12% to 23% by 2047, with an emphasis on nurturing sunrise industries.

Vision 2047: Transforming India through Manufacturing

• Goal: Achieve a 23% GDP contribution from manufacturing by 2047.
• Approach: Strengthen emerging sectors, offer production incentives, build workforce skills, and integrate India into global supply chains to create a self-reliant, inclusive, export-driven, and innovation-led industrial economy.

Understanding Sunrise Industries

• Definition:
  Sunrise industries are fast-evolving, innovation-centric sectors that cater to future global demands and are characterised by high growth, strong investment interest, and a dynamic start-up culture.
• Examples:
  Green hydrogen, renewable energy, electric vehicle (EV) batteries, semiconductors, medical technology, blockchain, technical textiles, cloud services, and clean energy.
• Global Alignment:
  These sectors are vital for achieving sustainability, advancing digitalisation, and supporting low-carbon economic development globally.
• Dynamic Nature:
  Without continuous innovation and evolving market strategies, sunrise industries can mature and decline into sunset sectors. Adaptive and forward-looking policies are thus critical to sustaining their growth.

Sunrise Industries: Drivers of Economic Transformation

• Economic Diversification:
  Facilitate a shift from traditional industries to modern sectors, reducing over-reliance on declining industries.
• Job Creation:
  Generate new formal employment opportunities by fostering entrepreneurship and expanding domestic and global markets, tapping into India’s youthful workforce.
• Technology Development and Transfer:
  Encourage research, attract foreign investments, and build domestic technological capabilities.
• Multiplier Effect:
  Stimulate growth across interconnected sectors like logistics, education, finance, and digital infrastructure.
• Balanced Growth:
  Help address India’s current overdependence on services (64% of GDP) by reinforcing the secondary sector.
• Boost to Global Competitiveness:
  Enhance India’s presence in next-generation global value chains, strengthening its export potential.
• Social Upliftment:
  Promote dignified employment, stable incomes, and equitable regional economic development.

Key Challenges

• Infrastructure Gaps:
  Modern transport, energy, and digital networks are needed, especially in smaller towns and emerging industrial zones.
• Regulatory Hurdles:
  A stable, predictable policy environment is essential to building investor confidence.
• Innovation and R&D Shortfalls:
  Fast-moving industries require consistent technological upgrades and breakthroughs.

Government Initiatives to Support Sunrise Sectors

• Production-Linked Incentive (PLI) Scheme:
  A major program by the Commerce Ministry targeting 14 sectors—including electronics, pharmaceuticals, telecom, and auto parts—to boost manufacturing and exports.
• Infrastructure Development:
  Initiatives like PM Gati Shakti, dedicated freight corridors, and the establishment of industrial clusters aim to create an integrated and efficient industrial ecosystem.
• Skill Building Programs:
  Through missions like Skill India and SAMARTH, the government is preparing the workforce with Industry 4.0 skills such as AI, robotics, and smart manufacturing.
• National Missions:
  Campaigns like Make in India and Atmanirbhar Bharat are strengthening self-reliance and resilience in critical industries.
• Clean Energy Initiatives:
  The National Green Hydrogen Mission supports India’s transition towards clean and sustainable energy sources, aligning with global climate goals.
• Electronics Sector Growth:
  The National Policy on Electronics is focused on boosting domestic manufacturing, fostering innovation, and increasing exports in the electronics sector.
• Workforce Formalisation:
  Efforts are underway to transition workers from the informal gig economy into structured, secure, and formal employment within high-growth sectors.