NITI Aayog Proposes Industrial Clusters, Integrated Parks To Make India Global Manufacturing Hub
NITI Aayog has called for greater use of cluster-based manufacturing and integrated industrial parks to help India achieve scale, reduce production costs and strengthen its position in global manufacturing. The proposed parks would offer shared infrastructure, utilities and faster approvals to manufacturers. The think tank described manufacturing as a key avenue for creating productive employment…
The NITI Aayog, India's premier think tank, has proposed the establishment of industrial clusters and integrated industrial parks to transform the nation into a global manufacturing hub. This strategy aims to scale up production, lower costs, and bolster India's position in the global market. Manufacturing is identified as a crucial avenue for creating employment opportunities for the young workforce, which has a median age of around 28 years.
By leveraging technology and improving production methods, the sector can generate formal jobs at various skill levels.
In its study, "Key Sectors to Position India as a Global Manufacturing Hub", NITI Aayog has identified 12 sectors where the country can seek global leadership by 2047. These sectors include electronics, telecom equipment, solar photovoltaics, pharmaceuticals, chemicals, automobiles, defense and drones, steel, capital goods, textiles, food processing, and leather and footwear. The first volume of the study delves into the details of chemicals, textiles, telecom and network equipment, and solar photovoltaics.
To reduce dependency on imports, the report suggests targeted incentives, viability gap funding, increasing domestic value addition, encouraging joint ventures and technology transfers, and improving labor productivity. It also emphasizes the importance of expanding export markets and achieving balanced free trade agreements.
Vice-Chairman of NITI Aayog, Ashok Lahiri, highlighted the need for economies of scale and scope, primarily relying on private-sector investment. The government's role should be to remove obstacles and create a conducive environment for businesses to invest profitably. For solar manufacturing, the report recommends expanding into polysilicon and wafer production, as well as diversifying export destinations, given India's heavy reliance on the US, which accounts for 97% of solar module exports from 2019-20 to 2025-26.
In the chemicals sector, the report highlights products like phenol, methanol, and acetic acid as potential candidates for reducing import dependence. The government is also working on setting up chemical parks with shared infrastructure. For textiles, NITI Aayog calls for higher productivity through skill development, technology adoption, labor welfare, and apprenticeships.
The report also encourages partnerships between industry and academia, as well as better accommodation for migrant workers. Additionally, the adoption of man-made fibers is recommended to help achieve a $100 billion textile export target by 2029-30.
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