Make in India 2.0: How Manufacturing Is Reshaping Market Sentiment

The manufacturing sector of India grew 11.89% in FY 2023-24. With this pace building up, the Make in India 2.0 is shaping up the manufacturing sector and making it the strongest driver of the country’s economic rise. 

And if you invest in Indian markets, this shift is impossible to ignore. You first need to see how quickly India’s manufacturing industry is gathering speed to expand. The momentum is broad, steady, and backed by solid numbers. 

Now let’s analyse more details about the Make in India 2.0 scheme here:

Introducing Make In India 2.0

Make in India began in 2014 with a simple idea: build with pride and grow domestic manufacturing. It created momentum, but the next phase demands far more. Make in India 2.0 urges India’s MSMEs to stretch beyond local comfort zones and build for global buyers. 

MSMEs already contribute nearly 30% of India’s GDP and almost half of its exports. Yet India’s share in global manufacturing exports is above 1.8%, while China holds about 14%. The gap highlights the need for Make in India 2.0 to push MSMEs toward bigger ambitions, not just bigger output.

Make in India 2.0 also calls for clarity in support systems. MSMEs often struggle with varying rules across countries, from packaging norms to environmental checks. They need simple channels to reach new markets, quick guidance on compliance, and training that helps them match global expectations.

Some of the manufacturing sectors under this Make in India 2.0 scheme are listed below: 

• Aerospace and Defence
• Capital Goods
• Pharmaceuticals and Medical Devices
• Automotive and Auto Components
• Bio-Technology
• Textiles and Apparel
• Chemicals and Petrochemicals
• Leather & Footwear
• Food Processing
• Electronics System Design and Manufacturing (ESDM)
• Gems and Jewellery
• Shipping

The government has been working to pull more domestic money into the Indian economy, and the recent push shows a clear intent to strengthen long-term growth. Large plans such as the National Infrastructure Pipeline are creating steady demand for steel, cement, power equipment and construction services. 

Liquidity support for NBFCs and banks has helped ease the credit crunch that once restricted fresh projects. Trade policy changes are also steering more activity toward Indian factories through higher local value addition and tighter import checks.

The Growing Strength Behind India’s Factory Output

Make in India 2.0 began with an idea to raise local production, attract capital that stays for the long haul, and set up an environment where industries could grow at a steady rate. A decade later, many of these ideas are showing clear impact.

Recent government data shows a sharp pickup in factory activity:

• Manufacturing output grew 5.8% in the first half of FY25
• Manufacturing now forms 17% of India’s GDP and this could rise to a 25% GDP share by 2025 due to schemes like Make in India. 

Let’s understand India’s manufacturing output growth from 1960 to 2023, with the help of a bar graph:

Now let’s see how this manufacturing sector base is made.

India’s manufacturing base is made by 10 sectors, and the numbers make this very clear. In FY24, just ten industries made up 71% of the entire manufacturing Gross Value Added (GVA). The two major sectors are given below:

• Basic metals sat right at the top with the largest share of fixed capital at 17.42%, along with 14.5% of total output and 11.56% of GVA. 
• Food products stood out for a different reason. They accounted for the highest share of factories at 16% and employed the largest slice of the workforce at 11.06%.

The PLI Schemes have played a significant role in the growth of the manufacturing sector.

The PLI Scheme: India’s Big Push Toward Stronger Manufacturing

The Production Linked Incentive scheme has become a cornerstone of Make in India 2.0. With nearly ₹1.97 lakh crore allocated across 14 sectors, it has encouraged investment far beyond initial expectations.

By August 2024, investments had reached ₹1.46 lakh crore, and estimates indicate this will exceed ₹2 lakh crore over the coming year. These investments have already pushed production and sales to around ₹12.50 lakh crore. It has also created roughly 9.5 lakh direct and indirect jobs, a figure expected to climb to about 12 lakhs soon.

These figures show how companies are responding with serious intent, which in turn helps shape market sentiment in a more positive direction. This makes it easier to understand why the PLI schemes carry so much weight in shaping sentiment today.

Why the PLI Scheme Matters for Market Sentiment

India’s push to reshape its manufacturing base gained new momentum with the Production Linked Incentive (PLI) Scheme. With an outlay of ₹1.97 lakh crore and 806 approved applications across 14 sectors, the scheme aims to raise manufacturing’s share of GDP to 25% and place India among the world’s major industrial economies. 

According to a CRISIL report, the PLI scheme is expected to create a massive wave of new business, with the potential to add around ₹35 to 40 lakh crore in extra revenue to the domestic manufacturing sector over the next five years. This gives investors a strong sense of how much room there is for manufacturing to grow in India.

It is one of the key reasons investors see this as a long-term driver of strength in the manufacturing space.

Here is what this effect creates:

1. Solar PV Modules

The PLI for high-efficiency Solar PV Modules is shaping India’s plan to build its own energy hardware backbone. Tranche I and II together target nearly 48 GW of fully integrated manufacturing lines, building stable supply chains for the renewable sector. As of June 30, 2025, companies have committed ₹48,120 crore to these projects.

2. Semiconductors

India is pushing hard to build its place in the global chip network, and the semiconductor PLI incentives sit at the center of this effort. Six approved projects are already underway, and four more units have received Union Cabinet approval for Odisha, Punjab, and Andhra Pradesh. These new units fall under the India Semiconductor Mission with a sanctioned outlay of ₹4,600 crore. They are expected to create direct work opportunities for about 2,034 skilled professionals and support a wide circle of suppliers. 

3. Textiles

The PLI for textiles, approved in September 2021 with an outlay of ₹10,683 crore, is aimed at raising the production of MMF apparel, MMF fabrics, and technical textiles. These segments help India build scale and meet rising global demand. Early signs of growth are clear. MMF exports reached nearly ₹525 crore in FY 2024–25, up from ₹499 crore the year before.

How Different Sectors Are Benefiting

Check how Make in India 2.0 is giving a big advantage to the manufacturing industries:

1. Electronics Manufacturing

Mobile phone production reached ₹2.9 lakh crore in FY24. India now makes nearly all smartphones sold in the country. Apple’s production division in India alone is touching billions of dollars in annual output. This sends a strong message to global investors about India’s potential as a reliable production base.

Companies like Dixon Technologies and Amber Enterprises have seen strong investor interest as production scales up.

2. Pharmaceuticals 

Pharma companies under PLI have put in ₹15,000 crore to expand capacity. Laurus Labs, Divis Laboratories, and Syngene International have planned expansion projects and this will help India maintain big manufacturing capacities.

3. Automobiles and Auto Components

The auto PLI program has seen ₹67,690 crore in announced investments. Tata Motors, Mahindra & Mahindra, and Hyundai Motor India have been working towards the demand for electric vehicles and auto components.

Why Manufacturing Sector Growth is Good News for Markets?

We’ve outlined the reasons why manufacturing sector growth will benefit markets: 

1. A Strong Multiplier Effect

More factories are running, suppliers are getting steady business, and companies are feeling confident enough to expand. This ripple effect has given a rare outcome and investors a sense that the programme has real depth.

2. Better Infrastructure Adds Confidence

PM GatiShakti brings together multiple ministries to speed up roads, ports, airports, freight routes, rail links, and other key projects. Such coordination raises confidence among investors who want smoother logistics and better access for factories.

3. Semiconductor Push Adds New Energy

With ₹76,000 crore set aside for the semiconductor programme, India is aiming for a serious presence in chip-making. Large projects from Micron and the Tata group have already been cleared. This shows the country’s desire to move into complex, high-value manufacturing.

4. FDI Flows Back the Story

India attracted around $42.1 billion in FDI during the first half of 2024. Also, India’s strong rise in global rankings for competitiveness and innovation has made it far more attractive to foreign investors. This is why global companies are increasing manufacturing in India. 

Conclusion

Make in India 2.0 is no longer just a policy push. It is shaping market perception through real numbers, larger production capacity, stronger infrastructure plans, and steady investor interest. Electronics, defence, autos, pharmaceuticals, and capital goods are already showing strong progress. 

With more factories coming up and global brands increasing their presence, markets are slowly adjusting their expectations for India’s manufacturing future.

So, India’s production story is not a distant hope anymore. It is turning into a solid, measurable shift that investors are beginning to watch more seriously.