Indian alternatives emerging as drivers of national infrastructure growth

Rising domestic demand is prompting manufacturers across sectors to scale up production, modernise equipment and invest in automation. This expanding industrial base is backed by the Production Linked Incentive (PLI) schemes, which have attracted ₹1.88 lakh crore, or approximately US$21 billion, in realised investment, according to data cited by the Indian Brand Equity Foundation from the Ministry of Commerce.

Government disclosures tabled in Parliament show that PLI-linked manufacturing has generated more than ₹16.5 lakh crore in incremental output, strengthening local supply chains and reducing dependence on imported components. Electronics manufacturing, in particular, has seen a marked shift, with India emerging as a net exporter of mobile phones. Officials attribute this change to sector-specific incentives and technology upgrades encouraged by the Ministry of Electronics and Information Technology.

Regional economies are also benefiting from this transition. Manufacturing expansion is contributing to job creation, improved connectivity and the development of new training infrastructure. The Union Budget for 2023–24 earmarked ₹10 lakh crore in capital expenditure, a substantial share of which is directed towards industrial and logistics infrastructure.

Small and medium enterprises, widely regarded as the backbone of Indian manufacturing, are gaining from the expanding ecosystem. Government initiatives such as the Digital MSME scheme and the Technology Centre Systems Programme are enabling smaller firms to adopt modern tools and processes, allowing them to integrate more effectively into domestic supply chains.

The strengthening of domestic capability is particularly evident in the defence sector. Through the Positive Indigenisation Lists, the Ministry of Defence has restricted imports of several critical platforms, shifting the production of artillery systems, radars, electronic warfare equipment and helicopters to Indian companies. Two Defence Industrial Corridors in Uttar Pradesh and Tamil Nadu are providing infrastructure and incentives to support this transition.

Logistics efficiency has also shown improvement. A joint assessment by the Department for Promotion of Industry and Internal Trade and the National Council of Applied Economic Research estimates India’s logistics cost at 7.97 per cent of GDP, reflecting progress under initiatives such as PM Gati Shakti and the National Logistics Policy.

Across government reports and industry assessments, a consistent pattern is emerging. The growing preference for Indian alternatives is contributing to a broader cycle of economic strengthening. From manufacturing capacity and technology adoption to reduced foreign exchange outflow and improved crisis preparedness, the shift is laying the groundwork for a more resilient industrial economy.

As India’s domestic market expands and consumers increasingly adopt home-grown brands across sectors, analysts believe the cumulative impact could shape the country’s industrial and strategic capabilities for decades to come.