India, April 28 -- The Government of India has issued a release:
Key Takeaways
A Global Value Chain (GVC) consists of a series of stages involved in producing goods or services, with each stage adding value and at least two stages occurring in different countries.
Large Integrated Manufacturing Hubs
Plug-and-play Infrastructure: Ready-to-use facilities that minimize setup time and costs, enabling industries to operationalize quickly and achieve faster returns on investment.
Sector-Specific Manufacturing Ecosystems
Micro, Small, and Medium Enterprises (MSME) Manufacturing Clusters
Corridor-Linked Industrial Nodes
Trunk infrastructure is the higher-order infrastructure development with the primary purpose of serving 'catchment' areas to be shared between developments, commonly provided by local governments. It includes the development of the main line of infrastructure, such as water supply, drainage, sewerage/septage, roads, streetlight, electricity, etc.
What Is Capital Expenditure?
2026-27 KEY BUDGET Announcements: Manufacturing hubs
Sector/Area
Announcement
Three new Chemical Parks to be established to strengthen cluster-based chemical manufacturing with shared utilities, safety infrastructure, and logistics connectivity.
Continued implementation of 7 PM MITRA (Mega Integrated Textile Region and Apparel) Parks approved earlier, aimed at creating large, integrated textile manufacturing hubs.
MSME (Micro, Small, and Medium Enterprises) Manufacturing Clusters
Strengthening of cluster-based manufacturing and Common Facility Centres (CFCs) to support MSME access to shared production, testing, and quality infrastructure.
Support for tool rooms, testing, and calibration facilities to strengthen domestic capital goods and industrial manufacturing capability.
Continued rollout of PM GatiShakti for coordinated, multimodal planning of infrastructure connected to industrial and manufacturing locations.
Global Biopharma & Manufacturing Hub: Biopharma SHAKTI
Outlay of Rs.10,000 crore over five years to build a biopharma-focused manufacturing ecosystem, including three new National Institute of Pharmaceutical Education and Research (NIPERs) and a nationwide network of over 1,000 accredited clinical trial sites.
When the Government incurs expenditure to create assets such as schools, hospitals, buildings, roads, bridges, canals, railway lines, etc., or reduces its liability, such as repayment of loans, etc., such expenditure is known as capital expenditure.
Chemicals
Textiles
Capital Goods / Industrial Support Infrastructure
Infrastructure Planning Linked to Manufacturing
Introduction
Manufacturing is a foundational pillar of India's economy, contributing around 16-17 per cent of GDP and employing over 27 million workers. As the country works towards transforming from a $3.7 trillion economy to a $30-35 trillion economy by 2047, manufacturing is expected to play a central role, with its share in GDP rising to at least 25 per cent.
In this context, India's manufacturing strategy has increasingly focused on the development of integrated manufacturing hubs, spatial ecosystems that combine physical infrastructure, regulatory support, common facilities, and connectivity. These hubs are designed to support scale, reduce transaction costs, and anchor long-term manufacturing activity, strengthening India's position within domestic and global production networks.
Manufacturing Hubs in a Changing Global Context
The Economic Survey 2025-26 observed that global manufacturing is undergoing a structural transition, with competitiveness shaped less by low-cost production and more by reliability, resilience, and strategic indispensability. As production processes become more technology-intensive and system-dependent, the ability to operate within stable, integrated manufacturing environments has emerged as a critical determinant of long-term industrial competitiveness.
Countries that are able to provide stable production environments are supported by infrastructure, logistics, skills, and institutional coordination, and they are better positioned to sustain manufacturing activity and retain long-term production mandates.
This global shift and the ongoing industrial momentum have been underpinned by a move towards high-technology manufacturing and a growing emphasis on strategic indispensability within GVCs. As manufacturing becomes increasingly technology-intensive and system-dependent, it underscores the importance of preparedness, productivity, and the capacity to scale. Manufacturing hubs providing integrated ecosystems with shared infrastructure, supply chain linkages, and logistics connectivity, enable firms to operate at scale, move up the value chain, and integrate more effectively into global production networks.
India's Industrial Manufacturing Trajectory
India's infrastructure approach has undergone a structural transformation, with the focus moving from project-level execution to system-level planning. Such system-level planning directly enhances the effectiveness of manufacturing hubs by reducing bottlenecks, improving logistics efficiency, and supporting timely execution.
Global investment trends increasingly recognise India as a preferred manufacturing destination. The country is currently ranked as the third most sought-after manufacturing location worldwide. At the same time, the composition of production is evolving, with medium- and high-technology activities accounting for 46.3% of total manufacturing value added, indicating a gradual shift towards more sophisticated industrial structures.
India's Manufacturing Hub Landscape
The manufacturing hub landscape across the country has evolved into a multi-layered ecosystem, reflecting differences in scale, sectoral requirements, and spatial planning. Rather than following a single model, policy interventions have supported diverse forms of manufacturing hubs. The manufacturing landscape today comprises large integrated parks, sector-specific ecosystems, MSME clusters, and corridor-linked industrial nodes, each designed to address specific production, logistics, and value-chain needs.
These are master-planned industrial zones with plug-and-play infrastructure that host anchor manufacturers and their supplier ecosystems in one location. They provide shared utilities, logistics, and support infrastructure, enabling quick project implementation and economies of scale. These parks may be multi-sector or sector-anchored and can be developed independently or within industrial corridors.
National Industrial Corridor Development Programme (NICDP) is a transformative initiative designed to establish Greenfield Industrial Smart Cities across India, positioning the country as a global manufacturing hub. Till date, 20 industrial smart cities have been approved by the Government of India which cover 7 industrial corridors and 13 States. Of these, 4 industrial smart cities namely Dholera (Gujarat), Shendra-Bidkin (Maharashtra), Integrated Industrial Township at Greater Noida (Uttar Pradesh) and Integrated Industrial Township at Vikram Udyogpuri near Ujjain (Madhya Pradesh) have been completed and other 16 are under various stages of development. These industrial nodes are being developed with plug-and-play infrastructure and multimodal connectivity.
PM MITRA (Pradhan Mantri Mega Integrated Textile Region and Apparel) represents large integrated manufacturing hubs tailored for the textile value chain, combining processing, manufacturing, logistics, and common facilities within a single park framework. These parks have been announced in seven states, including Tamil Nadu, Telangana, Gujarat, Karnataka, Madhya Pradesh, Uttar Pradesh, and Maharashtra.
Certain manufacturing sectors require specialised and capital-intensive infrastructure, making ecosystem-based manufacturing hubs essential. These hubs integrate production units with supplier networks, testing, regulatory, and skilling infrastructure to support complete value chains.
Micro, Small, and Medium Enterprises (MSMEs) constitute a core pillar of India's manufacturing ecosystem, with significant implications for manufacturing hubs at the regional level. MSMEs account for 35.4% of manufacturing output, contribute 48.58% of exports, and generate 31.1% of GDP, highlighting their substantial role in India's industrial economy.
The MSME sector comprises over 7.47 crore enterprises and employs more than 32.82 crore persons, making it the second-largest source of employment after agriculture. With such scale, MSMEs are central to the development of manufacturing hubs, particularly in Tier-2 and Tier-3 cities, where clusters often form around shared skills, local supplier networks, and cost advantages.
Complementing these hub models are corridor-enabled industrial regions, which emphasise spatial integration and logistics efficiency as part of a broader industrial ecosystem, rather than functioning as standalone production units. These corridors provide trunk infrastructure, freight connectivity, and multimodal logistics, enabling industrial concentration at scale.
Industrial corridors such as the Delhi-Mumbai Industrial Corridor (DMIC), Chennai-Bengaluru Industrial Corridor (CBIC), Amritsar-Kolkata Industrial Corridor (AKIC), and Vizag Chennai Industrial Corridor (VCIC) are designed to support manufacturing hubs and clusters by improving connectivity and facilitating integrated planning across regions.
State Capacity and On-Ground Execution
The performance of manufacturing infrastructure hubs is overall shaped by state capacity in land aggregation, trunk infrastructure provisioning, and regulatory approvals. Strengthening execution and coordination has therefore been a key focus of recent infrastructure policy initiatives.
To address coordination challenges in infrastructure planning and delivery, the Government has launched the PM Gati Shakti National Master Plan, an integrated platform that brings together infrastructure-related data and projects of 44 central ministries and 36 states/Union Territories. The initiative enables coordinated planning of transport, logistics, and utility infrastructure, with a focus on multimodal connectivity, last-mile linkages, and time-bound execution.
To reinforce infrastructure creation, public capital expenditure has increased substantially in recent years. The Government capital outlay has grown from Rs.2 lakh crore in FY2014-15 to a Budget Estimate of Rs.12.2 lakh crore in 2026-27. This sustained increase has strengthened the physical backbone required for large manufacturing ecosystems, including industrial parks, logistics infrastructure, and freight connectivity.
Institutional mechanisms have also been introduced to improve project preparedness and execution capacity. The India Infrastructure Project Development Fund (IIPDF) supports Central and State authorities by financing transaction advisers to develop bankable infrastructure projects, helping create a robust project pipeline. In parallel, the National Infrastructure Enablement Index (NIEI) has been developed to assess the institutional preparedness of States/UTs and Central Ministries/Departments for infrastructure delivery.
These measures have improved the enabling environment for manufacturing hubs. State-level initiatives across the country illustrate the development of manufacturing hubs across different sectors and regions:
Meanwhile, industrial corridors, including the Delhi-Mumbai Industrial Corridor and the Chennai-Bengaluru Industrial Corridor, further reflect coordinated Centre-State execution, with industrial nodes developed through joint institutional frameworks and phased infrastructure provisioning.
Policy Support for Infrastructure Hubs & Budget Announcement
The policy framework in recent years has focused on the creation of integrated infrastructure-led manufacturing, recognizing that sustained industrial competitiveness depends on infrastructure, coordination, and execution rather than firm-level interventions alone.
This strategic approach is reflected in mission-oriented initiatives such as the National Manufacturing Mission, PM-MITRA Park, PM-Gati Shakti, Digital Public Platforms (like ULIP), sector-specific capacity-building measures, and the development of industrial corridors, parks, and clusters that combine physical infrastructure with institutional support. Together, these interventions aim to minimise logistics friction, financing delays, and coordination losses that previously constrained industrial competitiveness.
The Union Budget 2026-27 lays the foundation by advancing infrastructure-led manufacturing through focused support for manufacturing parks, shared facilities, and improved connectivity. The Budget reinforces the hub-based approach to manufacturing, with an emphasis on scale, reliability, and stronger linkages across value chains.
Conclusion
As India works towards its goal of becoming a Viksit Bharat by 2047, manufacturing is expected to play a crucial role in supporting sustained economic growth and employment generation. The Economic Survey and Union Budgets reflect the importance of policy support and public investment in strengthening manufacturing through infrastructure-led development and integrated industrial ecosystems.
An important element of this strategy is the growing focus on Tier-2 and Tier-3 cities, where manufacturing hubs are benefiting from cost advantages, local skills, and improved connectivity. Continued emphasis on such regions, supported by coordinated government policies and infrastructure development, will be essential for ensuring that manufacturing-led growth is broad-based, resilient, and aligned with India's long-term development objectives.
References
Economic Survey
https://www.indiabudget.gov.in/economicsurvey/doc/echapter.pdf
UNIDO
https://www.unido.org/sites/default/files/unido-publications/2024-11/IID%20Policy%20Brief%2015%20-%20Manufacturing-led%20growth.pdf
Ministry of Commerce & Industry
https://www.pib.gov.in/PressReleasePage.aspx?PRID2114840®3&lang2
https://www.pib.gov.in/PressReleasePage.aspx?PRID1734169®3&lang2
https://sansad.in/getFile/loksabhaquestions/annex/183/AU3656_lSj6wd.pdf?sourcepqals#:~:text1.97%20lakh%20crore%20to%20enhance,been%20placed%20at%20Annexure%20I
https://www.pib.gov.in/PressReleseDetailm.aspx?PRID2081537®3&lang2
Ministry of Finance:
https://www.pib.gov.in/PressReleasePage.aspx?PRID2219990®3&lang1
https://www.pib.gov.in/PressReleasePage.aspx?PRID2221443
https://www.pib.gov.in/PressReleseDetail.aspx?PRID2219991®3&lang1
https://www.pib.gov.in/PressReleseDetailm.aspx?PRID2221458®1&lang1
https://www.pib.gov.in/PressReleasePage.aspx?PRID2219992®3&lang2
https://www.pib.gov.in/PressReleasePage.aspx?PRID2219984®20&lang1
DPIIT
https://www.dpiit.gov.in/offerings/schemes-and-services/details/industrial-corridors-YjM2UDNtQWa
https://pmgatishakti.gov.in/pmgatishakti/login#:~:textThe%20National%20Master%20Plan%20will,terms%20of%20time%20and%20cost.&textIndividual%20Ministries%20and%20Departments%20often,coordination%20of%20work%20between%20them.&textThe%20plan%20will%20provide%20the,visibility%20to%20the%20executing%20agency.&textAll%20Ministries%20and%20Departments%20will,and%20updating%20the%20master%20plan.
Ministry of Education, NIOS
https://nios.ac.in/media/documents/SrSec318NEW/318_Learner_guide_eng/318_LG_E_L29.pdf
Gujarat State Government
https://www.vibrantgujarat.com/invest-gujarat
Tamil Nadu State Government
https://spc.tn.gov.in/wp-content/uploads/TN_AUTOMOTIVE_FUTURE.pdf
Uttar Pradesh State Government
https://invest.up.gov.in/defence-aerospace-sector/
IBEF
https://www.ibef.org/industry/manufacturing-sector-india
https://www.ibef.org/government-schemes/pm-gati-shakti-yojana
https://www.ibef.org/blogs/changing-india-s-industrial-environment-an-overview-of-the-national-industrial-corridor-development-programme-nicdp
Ministry of Housing and Urban Affairs
https://pmay-urban.gov.in/uploads/guidelines/Operational-Guidelines-of-PMAY-U-2.pdf#:~:text(SLNA)%20Nodal%20Agency%20designated%20by%20the%20State/UT,between%20developments%2C%20commonly%20provided%20by%20local%20governments
Ministry of Electronics & IT
https://www.pib.gov.in/PressReleasePage.aspx?PRID2221522®3&lang1
Ministry of Micro,Small & Medium Enterprises
https://www.pib.gov.in/PressReleasePage.aspx?PRID1982305®3&lang2
https://www.pib.gov.in/PressReleasePage.aspx?PRID1911134®3&lang2
Indian Industrial Land Bank
https://indiaindustriallandbank.gov.in/exploreParkReport
NITI Ayog
https://www.niti.gov.in/sites/default/files/2025-04/India_Hand_Power_Tools_Sector_Report.pdf
NICDC
https://www.nicdc.in/projects/4-projects-developed/integrated-industrial-township-vikram-udyogpuri
Ministry of Textiles
https://www.pib.gov.in/PressReleaseIframePage.aspx?PRID2117663®3&lang2
https://www.pib.gov.in/PressReleasePage.aspx?PRID2205530®3&lang2
Ministry of Chemicals and Fertilizers
https://www.pib.gov.in/PressReleasePage.aspx?PRID2224376®3&lang2
Council of State Industrial Development and Investment Corporations of India (COSIDICI)
https://www.cosidici.com/
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Disclaimer: Curated by HT Syndication.
