Union Budget 2025: National Manufacturing Mission for small, medium, large industries soon

The mission’s announcement comes as India aims to increase the share of manufacturing in its gross domestic product (GDP) to 25 per cent from the current 17 per cent. The Economic Survey 2024-25 also noted that while “steadily recovering”, manufacturing growth in India “remains slightly below its pre-pandemic trajectory”.

Under the mission, clean tech manufacturing will be supported to improve domestic value addition in solar PV cells, electric vehicle (EV) and grid-scale batteries, electrolyzers, wind turbines, and high voltage transmission equipment.

The mission will also help counter China’s dominance in the clean tech space, where it controls 80 per cent of the world’s battery manufacturing capacity and produces roughly 80 per cent of the main components used in solar cells.

“China’s vertical integration across the entire electric vehicle (EV) supply chain, from mining to EV manufacturing, has enabled it to retain its global dominance in this sector. It is also pertinent to note that about 70 per cent of the world’s rare earth minerals, which are critical resources for high-storage batteries, are processed by Chinese companies,” the survey said.

Sitharaman on Saturday also announced a focus product scheme for India’s footwear and leather sector. “The scheme will support design capacity, component manufacturing, and machinery required for production of non-leather quality footwear, besides the support for leather footwear and products. The scheme is expected to facilitate employment for 22 lakh persons, generate turnover of Rs 4 lakh crore and exports of over Rs 1.1 lakh crore,” she said.

The government has particularly identified electronics manufacturing as a major driver of growth in the coming years, with Rs 8,885 crore budgeted for the Production Linked Incentive (PLI) scheme for smartphone manufacturing for 2025-26, the highest among all PLI schemes.

The PLI scheme has allowed Apple to create a significant contract assembly base in the country, via Foxconn, as the company looks to move some of its production away from China. Companies like Samsung have also ramped up production in the country, with the likes of Google also initiating their manufacturing operations here.

Production under the scheme is being used not just for meeting domestic demand, but also for exports. As a result, smartphones have emerged as India’s second-largest export category, according to harmonized system (HS) codes used for international trade classification by the World Trade Organization (WTO).