By Chetan Aggarwal
Last week, when Prime Minister Narendra Modi inaugurated Suzuki Motor’s electric vehicle (EV) facility in Hansalpur, Gujarat, it was more than just an industrial ribbon-cutting. It signaled India’s rising role in global value chains. The plant will export EVs to over a hundred countries, while its joint venture with Toshiba and Denso has begun manufacturing lithium-ion battery electrodes with over 80% domestic value addition. Hansalpur captures India’s shift from assembling what others design to also manufacturing complex, high-value technologies for the world.
India's Rising Role in Global Value Chains
That shift must be seen in the context of India’s maturing approach to self-reliance. The first phase, the Swadeshi movement, was born in the crucible of colonial exploitation and drew strength from Dadabhai Naoroji’s “drain of wealth” critique. Mahatma Gandhi popularized it, and the charkha became a symbol of the freedom struggle. Swadeshi was powerful but defensive: its tool was boycott, and it served well for the fledgling independence movement. After independence, Nehru’s emphasis on heavy industry, based on misplaced trust in the understudied Soviet model, soon stagnated under the license raj and closed-economy model. Both eras saw self-reliance as protection: a shield against foreign domination, even if quality and competitiveness suffered.
In contrast, Aatmanirbhar Bharat (self-reliant India) is assertive. It speaks of building strength not by withdrawal but by engagement, urging entrepreneurs to innovate, youth to take risks, and products to meet global standards in technology and sustainability. It is aspirational rather than sacrificial, rooted in confidence that Indian design and manufacturing can be the best in the world. Where earlier versions of Swadeshi resisted, today’s Aatmanirbhar creates.
The Automotive Revolution
The auto sector shows how this is taking shape. A decade ago, automobile exports stood at around ₹50,000 crores. Today, they exceed ₹1.2 lakh crore annually, with passenger electric vehicles rising and new indigenous models entering export markets. Beyond cars, Indian firms are developing novel approaches to battery technology and charging, including climate-tailored solutions such as the option to rent battery packs. This is not just catch-up growth but innovation.
Transport systems more broadly tell a similar story. When the Delhi Metro began in the early 2000s, most of its rolling stock came from overseas. Today, the majority are made in India, with coaches being exported as far as Sydney. The Vande Bharat trains, designed and manufactured indigenously, run across the country and showcase India’s ability to produce world-class passenger stock.
India’s Aerospace and Defence Leap
Aerospace and defense add another dimension. HAL’s Tejas fighter jet has been deployed. The Philippines has ordered BrahMos missiles, India’s first big-ticket defense export deal. Indian shipyards have built frigates, corvettes, and even exported smaller warships to Mauritius, Seychelles, and Vietnam. Defense exports have thus crossed ₹21,000 crore in 2023-24, a twentyfold rise in less than a decade.
This manufacturing maturity rests on a deliberate policy push. Quality standards have blocked low-grade imports and raised expectations for domestic industry. In steel, over 140 product categories now require Indian certification, a model being extended to toys, cables, and electronics. Trade agreements include safeguard clauses to protect sensitive sectors, unlike earlier agreements, which created dependencies in critical sectors. Production-linked incentive schemes across 14 sectors are driving capacity in advanced cells, electronics, semiconductors, and solar modules. iPhone assembly in Tamil Nadu and Karnataka, and the rise of solar hubs in Andhra Pradesh and Gujarat, are tangible outcomes of these schemes.
Policy Push and Infrastructure
Infrastructure has also begun to catch up. Programs such as Gati Shakti and the dedicated freight corridor are linking manufacturing clusters to ports and markets, building logistics to make large-scale production viable. This support, though less visible than a new factory, is vital for competitiveness.
There is room to do a lot more. India must climb the technology ladder by investing in design, R&D, and intellectual property. The innovation ecosystem must expand to ensure universities, startups, and industry collaborate more effectively, compressing the distance between research and market. Critical minerals for batteries and semiconductors need long-term sourcing and recycling strategies. Labor reforms and skill upgrades must keep pace so that productivity rises alongside capacity. Consistent implementation of standards is essential, but it must avoid adding red tape.
If there is one factor that can accelerate this journey, it is mindset. India’s financial inclusion drive, through Jan Dhan accounts, Aadhaar, and mobile phones (the JAM trinity), achieved in just six years what the World Bank says took other countries five decades. That experience demonstrates how India can be ambitious and close gaps when policy, technology, and society align. Applied to manufacturing, the effect could be transformative. The green shoots that are visible in manufacturing can soon become a sustained harvest. The trajectory is clear.
(Chetan Aggarwal is a public policy consultant. He is a Senior Non-resident Fellow at Council for International Economic Understanding and a Visiting Fellow at the Center of Policy Research and Governance.)
Views are personal, and do not represent the stance of this publication.
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