Promoting Industrial Self-Reliance in India

GS3 – Indian Economy

Context

India’s pursuit of Aatmanirbhar Bharat and Viksit Bharat@2047 aims at achieving self-reliance in key industries like automotive and capital goods, guided by sustainable initiatives from the Ministry of Heavy Industries.

Major Initiatives Enhancing Self-Reliance

• Production-Linked Incentive (PLI) Schemes:
  • Automobile Components:
    • ₹25,938 crore allocated (FY23–FY27) to boost domestic output of Advanced Automotive Technology (AAT).
    • Six OEMs and seven component makers have surpassed 50% local value addition.
  • Advanced Chemistry Cell (ACC):
    • ₹18,100 crore sanctioned to encourage domestic EV battery production, cut imports, and improve affordability and quality.
• Electric Vehicle (EV) Promotion:
  • FAME I & II:
    • These schemes promoted early adoption of EVs and built preliminary infrastructure.
  • PM E-DRIVE (2024):
    • Offers wide-ranging support for electric two/three-wheelers, buses, trucks, ambulances.
    • Upgrades testing and certification systems.
  • NITI Aayog’s 2030 Projections:
    • 70% commercial vehicles, 30% private cars, 40% buses, and 80% of two/three-wheelers will be electric.
• Capital Goods Sector Development:
  • Competitiveness Enhancement Scheme:
    • Started in 2014 and scaled up in 2022 with ₹1,207 crore.
    • Aims at strengthening MSMEs via Samarth centres and advanced skilling.
    • Sector size increased from ₹1.59 lakh crore (FY15) to ₹3.84 lakh crore (FY25).
  • High-Growth Sub-sectors:
    • Output in machine tools, textile machinery, and heavy construction equipment has tripled.
• Domestic Production of Rare Earth Magnets:
  • Focused on reducing reliance on imports, especially for sectors like EVs, wind energy, and electronics, through R&D and global partnerships.
• Accelerating Innovation:
  • CAMRAS Programme (IISc Bengaluru):
    • Promotes innovation in robotics, space, defence, and green technologies via public–private collaboration.

Impact of India’s Automotive Transition

• Global Standing:
  • India is now the 3rd largest automobile market, surpassing Japan.
• EV Growth:
  • EV sales jumped from 2,343 units (FY15) to 19.67 lakh units (FY25) due to FAME and state-led initiatives.
• Energy and Environmental Gains:
  • Supports India’s Net Zero 2070 goal by reducing oil imports and promoting cleaner mobility.
• Strengthened Industrial Ecosystem:
  • Develops robust EV-related supply chains, including for batteries, semiconductors, and charging infrastructure.
• Boost to Exports:
  • Enhances India’s presence in the global EV and auto components market.
• Job Creation:
  • Expands employment opportunities in R&D, manufacturing, and green mobility sectors.