Union Budget 2025 | Coordinated efforts from govt, private, academia, financial players key for making India manufacturing hub: Economic Survey

New Delhi: Coordinated efforts from the government, private sector, academia, R&D institutions, and financial stakeholders are crucial for India to achieve its goal of becoming a manufacturing powerhouse amid an uncertain global environment, Economic Survey 2024-2025 said on Friday.

It also said that the rise of China as a manufacturing powerhouse and its impact on the manufacturing aspirations of other nations, as well as the supply of minerals, materials, machinery, and equipment needed for energy transition, pose challenges.

Amidst this, it said, India is in the middle of a change that represents an unprecedented economic challenge and opportunity.

The survey stressed that China is a dominant force in the global manufacturing and energy transition ecosystems as it has gained a strategic advantage leveraging its competitiveness and economic policy to access and control key resources recognised today as critical for global supply chains.

"Hence, in a rather unsupportive global environment, it calls for lasting, coordinated efforts from all tiers of government, the private sector, the skilling ecosystem, academia and R&D institutions, as well as financial stake holders to enable India to realise its ambition as a manufacturing powerhouse," the Survey said.

It added that the domestic manufacturing efforts under the PLI (Production Linked Incentive) scheme are expected to significantly support India's renewable energy targets by reducing costs, improving energy security, and boosting employment.

Domestic capacities are being built, but for now, India sources 75 per cent of lithium-ion batteries from China, and it has near negligible production capacity for key components like polysilicon, ingots, and wafers.

It added that there is a dependency of the world on China for energy transition efforts.

"India has ambitious goals for energy transition despite being one of the lowest per capita emitters of greenhouse gases. Dependence on China-made goods to achieve that transition enhances the complexity of the challenge for India," the survey said.

China is a dominant force in the global manufacturing and energy transition ecosystems.

It has gained a strategic advantage leveraging its competitiveness and economic policy to access and control key resources recognised today as critical for global supply chains.

"The effects of the rise of China as a manufacturing colossus are seen in automobile (especially electric vehicles) manufacturing, mining and refining capacity for critical minerals (Copper, Lithium, Nickel, Cobalt, Graphite, etc.) and in clean energy equipment," it said.

Further, it suggested to accelerate and amplify the deregulation agenda already underway in the last ten years.

"Also, every state in the country can learn from the best practices of other states in different areas so that all progress in unison," it said.

Union Budget 2025 | Nirmala Sitharaman, who continues to be Finance Minister, will present her record 8th Union Budget this time. While inflation has burnt a hole in the pockets of 'aam janata', reports suggest there might be a tax relief for those making up to Rs 15 lakh per year. Track the latest coverage, live news, in-depth opinions, and analysis only on Deccan Herald. Also follow us on WhatsApp, LinkedIn, X, Facebook, YouTube, and Instagram.