Industrial Growth & Manufacturing
Logistics costs absorb 14% of India's GDP compared to 8% global benchmark. Manufacturing accounts for only 17% GDP.
Main Problems
High Domestic Logistics Cost: Logistics absorb 14% of India's GDP compared to the 8% global competitive benchmark
Low Manufacturing GDP Contribution: Manufacturing share of GDP remains stagnant at 17% against the Make in India target of 25%
PLI Scheme Disbursement Lag: Less than 18% of committed Production Linked Incentive (PLI) funds disbursed due to bureaucratic audits
SME Credit Gap: Micro, Small & Medium Enterprises face an estimated ₹25 lakh crore formal credit supply shortage
Land Acquisition & Regulatory Delay: Industrial project setup experiences average delays of 28 months for land & eco clearances
High Industrial Electricity Tariffs: Commercial power tariffs in India are among the highest in Asia, penalizing energy-intensive manufacturing
R&D Spending Deficit: Gross expenditure on R&D (GERD) stands at 0.65% of GDP compared to 2.4% in China and 3.5% in South Korea
Import Dependency on Critical Components: Over 70% of active pharmaceutical ingredients (APIs) and solar cells imported from single sources
Current Status
Latest Update
CAG report reveals allocated funds for Industrial Growth & Manufacturing remain under-utilized. Ministry requests implementation extension.
June 2026