According to a recent report from Goldman Sachs, India has seen significant growth in employment and exports within capital-intensive industries over the past decade. Key sectors such as electronics, chemicals, and machinery are leading this trend, driven by government initiatives aimed at boosting production and assembly capabilities.
The report highlights that these capital-intensive industries are experiencing double-digit export growth, reflecting India’s shift towards a more valuable export portfolio. This growth indicates progress in developing high-value products for international markets.
Notably, employment growth in capital-intensive sectors has outpaced that in labor-intensive sectors, such as textiles, footwear, and food and beverages. The findings suggest that while capital-intensive industries are expanding rapidly, labor-intensive sectors still account for a larger share of overall employment in the country.
This transformation in the manufacturing landscape is largely attributed to government reforms designed to enhance competitiveness and foster sustainable economic growth. Central to these reforms are the Production-Linked Incentive (PLI) schemes, introduced in phases starting in 2020. These initiatives aim to boost domestic manufacturing, stimulate technological advancements, and attract both foreign and local investments.
With a total incentive outlay of ₹1.97 lakh crore, the PLI schemes encompass 14 critical sectors, including electronics, pharmaceuticals, drones, and specialty steel. The incentives are intended to increase production capacity, create jobs, promote exports, and reduce reliance on imports—all part of India’s vision for a self-reliant economy by 2047 (Viksit Bharat 2047).
As of June 2024, these schemes have successfully attracted investments of ₹1.32 lakh crore and have significantly boosted manufacturing output, which reached ₹10.9 lakh crore. In terms of exports, the PLI initiatives have contributed ₹4 lakh crore, solidifying India’s position as a rising player in the global marketplace.
