Make in India turns 12 with defence exports, PLI driving growth

India’s Make in India initiative marked its 12th anniversary this month with a quiet but measurable shift: defence exports and production-linked incentives are now the program’s most visible successes. Electronics manufacturing, too, has grown, though the gains remain uneven across sectors. The numbers tell the story: defence exports have risen steadily, and the production-linked incentive (PLI) schemes have attracted billions in manufacturing investment, particularly in electronics. Yet the broader vision—a self-reliant industrial base—remains a work in progress.

The defence sector stands out. Exports have climbed, driven by domestic firms supplying components and systems to global buyers, including governments in regions where diversification is a priority. This is no accident. The government has pushed state-owned enterprises to partner with private players, and defence startups have begun securing contracts that were once the preserve of established players. The trend aligns with a broader global rethink of supply chains, where stability—not just cost—has become a priority. India’s pitch as a manufacturing hub is gaining traction, but only in pockets where the state has backed its rhetoric with policy muscle.

PLI schemes have been the other bright spot. Designed to offset India’s higher production costs, the incentives have lured electronics manufacturers, particularly in smartphones and components. The results are tangible: local production of mobile phones has surged, and exports have followed. But the scheme’s success is narrowly concentrated. Other sectors—pharmaceuticals, textiles, automotive—have seen far less impact, either because the incentives were poorly calibrated or because global competition was too fierce. The lesson is clear: industrial policy works best when it is targeted, not scattershot.

The contrast with India’s semiconductor ambitions is instructive. Despite $1.4 billion in equity funding since 2025, the sector remains nascent. Bengaluru has emerged as a design hub, but fabrication plants are still years away from scale. This is not for lack of trying. The government has offered subsidies and land, but the capital and expertise required for chip manufacturing are orders of magnitude greater than assembling smartphones. The gap between policy intent and execution is wider here than in defence or electronics.

For startups and investors, the story is mixed. Late-stage funding in India has dropped 38% in 2025-26, and capital is consolidating around fewer, larger deals. This suggests a market where only the strongest survive, but it also reflects a broader global pullback in venture funding. The defence and manufacturing sectors offer a counterpoint: here, the state is the primary customer, and success depends as much on navigating regulatory hurdles as on product-market fit. For founders, this means a different kind of due diligence—one that weighs policy stability as heavily as market size.

The next test for Make in India will be whether it can move beyond its current successes. Defence and electronics have benefited from focused policy support, but other sectors lag. The government’s recent push into quick commerce—Amazon’s $3 billion bet on its India unit—shows that domestic consumption remains a key driver. Yet consumption alone cannot replace industrial depth. The real question is whether India can build the supply chains, skills, and infrastructure to compete in high-value manufacturing, not just assembly.

For now, the program’s 12-year record is a study in incremental progress. The gains are real, but they are also narrow. The challenge ahead is to replicate that success in sectors where the state’s role is less direct—and where global competition is fiercer. That will require not just more policy tweaks, but a willingness to accept that industrial transformation takes decades, not years. The world is watching, but India’s real audience is its own founders and investors. They are the ones who will decide whether Make in India remains a slogan or becomes a platform.

Sources: yourstory.com