Industry: All about Business Reforms (2024-25) | Indian Economy for UPSC CSE PDF Download

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07
CHAPTER
191
INDUSTRY: ALL ABOUT 
BUSINESS REFORMS
The global manufacturing landscape has undergone significant shifts over the 
past decade. India has been one of the dynamic economies that gained greater 
presence in the space gradually vacated by developed countries. A strategic 
emphasis on public capital formation and significant logistic improvements 
has underpinned this achievement. Lately, however, there have been serious 
challenges to global manufacturing in terms of persistent geopolitical tensions, 
aggressive industrial and trade policies, supply chain disruptions, and global 
trade slowdown. This has posed a challenge to export demand for India’s 
manufactured products. 
Industries such as steel, cement, chemicals, and petrochemicals have stabilised 
industrial growth, while consumer-focused sectors like automobiles, electronics, 
and pharmaceuticals have emerged as growth drivers. As we progress,  fostering 
R&D investments, innovations, enhancing the growth and formalisation of 
smaller manufacturers will drive growth across various sectors.
State-level analysis indicates that business reforms in states are likely to foster 
industrial development. Achieving India’s ambition of becoming a strong 
manufacturing power necessitates sustained and coordinated efforts from all 
tiers of government, the private sector, the skilling ecosystem, academia and 
R&D institutions. 
GLOBAL BACKGROUND
7.1 In the global manufacturing space, high-income countries have lost a significant 
part of their share during the last decade
1
. This was largely gained by the upper middle-
income countries, mainly based on China’s strength. The share of lower middle-income 
economies did not, in general, increase. Yet, India managed to improve its share in the 
pie and global presence. 
7.2 However, with 2.8 per cent of the global share in manufacturing, compared to 
China’s 28.8 per cent, India has a large opportunity to climb up the ladder
2
 (chart 
VII.1(a)). India also has a substantial scope to improve the contribution of the industrial 
sector in GDP in relation to its comparator countries (chart VII.2(b)). More so in the 
1  World Development Indicators, World Bank.
2   United Nations Industrial Development Organisation (UNIDO).