Factories of future: Built on 25 years of reform & execution

India is a country of enterprise. We have had large business houses, small and medium businesses, and a strong trading community. In the last 25 years, whether it is Gujarat or India, under the leadership of Narendra Modi, Indian industry and entrepreneurship have developed and flourished.

Industry needs an environment of confidence for capital to take risks and commit for the long term. Modi created that first in Gujarat.

The Gujarat Approach

The Vibrant Gujarat Summit, launched in 2003, was an early expression of this approach. It became a platform for encouraging industry, understanding concerns of enterprises and improving ease of doing business.


The Gujarat approach was also about building industrial ecosystems. Ports, roads, power, industrial estates and clusters were developed together. Dahej became a major chemicals and petrochemicals centre. Sanand developed into an automobile and engineering hub. Kutch emerged as a major centre for industry and renewable energy.

Also read | Manufacturing sentiment improves in Q2

The larger lesson from Gujarat is that manufacturing responds when infrastructure, policy and entrepreneurial energy begin moving in the same direction. When Modi moved from Gandhinagar to New Delhi in 2014, his understanding of industry and manufacturing got a larger canvas to work on.

Several reforms have improved the environment for industry. GST created a more integrated national market and removed a web of multiple taxes. The Insolvency and Bankruptcy Code created a framework through which capital and productive assets could be redeployed. Digitisation and formalisation brought more economic activity into the formal system. The four Labour Codes consolidated and rationalised existing labour laws. Together, these changes have made it easier for businesses to operate and grow.

Infrastructure spending has addressed one of the oldest constraints on Indian industry, which is the cost and time involved in moving goods. Roads, railways, ports, airports and expressways are becoming the arteries of the economy. The Eastern and Western Dedicated Freight Corridors have created a new backbone for freight movement. This matters especially to small and medium industries that cannot afford to build their own logistics network and fleet. Better connectivity improves their competitiveness and changes the economics of manufacturing.

Greater Global Access

Indian industry has been given greater access to markets beyond India through trade agreements with several countries. The combination of a large domestic market and expanding access to global markets gives Indian manufacturers an opportunity that was much harder to envisage even a decade ago.

Also read | India to widen services production index to include education, health and defence

Modi's push towards manufacturing has coincided with a global moment when the world itself is reassessing where it produces and from whom it sources. Pandemic, geopolitical conflicts, technology restrictions and weaponisation of critical materials have reinforced the importance of reliable manufacturing partners.

India's Industrial Revolution

The production-linked incentive programme marks an important stage in India's industrial journey. With over ₹2.4 lakh crore investments committed across 14 sectors, PLI programme is expanding India's manufacturing capacity, attracting investment, creating jobs and boosting exports across industries.

Electronics provides a clear illustration of how quickly an industrial base can change. Production and export volumes of electronics have increased in double and triple digits. Some of the world's leading smartphone brands are now making phones in India.

Semiconductors represent an even more ambitious step. India is building chips and the ecosystem behind them, from design and fabrication to packaging, materials and talent. Manufacturing capability is also becoming a national security question. Modi has increasingly viewed defence manufacturing through this lens, with greater emphasis on indigenous equipment, domestic R&D and making India a global supplier of defence technology. Defence exports rose 56-fold in the last 12 years.

Sunrise Sectors

In defence, space, drones and deep technology, young companies are entering sectors which were closed to them earlier or had high entry barriers.

Modi has encouraged young people to pursue research and innovation. The ₹1 lakh crore Research, Development and Innovation Fund intends to bring capital into deep tech, strategic technologies and sunrise sectors. This is a foundation for tomorrow's industrial capabilities to be created by today's research.

I have been fortunate to personally see Modi's interest in industrial development and his willingness to engage with industry leaders. When he travels abroad and finds something interesting, he discusses it with Indian industrialists and encourages them to think beyond conventional dimensions. He pushes entrepreneurs to see their work as part of nation-building.

There is a larger line of thought emerging from these 25 years of Modi's leadership. Industry is being seen as an expression of national capability, rather than just an economic activity. His focus on a Viksit Bharat is a clarion call for Industry to rise and produce not only for India but also become global players.


The author is Founder and Director, Kotak Mahindra Bank