From Imports to Innovation:
India’s Rise as a Global Manufacturing Force

For decades, India’s economic story was often defined by its burgeoning services sector, particularly IT outsourcing. While this remains a cornerstone of its prosperity, a new “yellow rose” is rapidly blooming, fundamentally reshaping India’s global economic identity: its emergence as a significant player in high-tech manufacturing, even for premium, globally recognized products. This marks a profound shift from being a mere consumer of advanced goods to a producer and exporter.

Mobile Phones:

The most compelling evidence of this transformation lies in the story of iPhone manufacturing in India. What began as a move to assemble some iPhones for the domestic market, driven in part by India’s strategic push for “Make in India” and higher import duties on finished goods, has now evolved into a much grander vision. Apple’s iPhone production in India surged to record levels in the first half of 2025, growing over 50% year-on-year to nearly 24 million units. India’s share of global iPhone manufacturing has expanded rapidly, from around 1% in 2021 to 14% by early 2024, with projections suggesting it could reach 25% or more by 2025. A substantial majority of these iPhones—about 78%—are exported, particularly to the US market, positioning India as the largest supplier of iPhones to the United States^[1][2][3].

This decision signals a monumental validation of India’s maturing manufacturing ecosystem. It signifies that India is no longer just capable of producing simpler goods but has built the complex supply chains, skilled labor force, logistical capabilities, and governmental support necessary to handle the intricate, high-precision manufacturing demands of a leading global technology company. This transition pushes India significantly up the global value chain, converting it from an assembly hub to a full-scale manufacturing center for worldwide export.

Rising Manufacturing Sectors in India

However, India’s manufacturing ascent extends well beyond mobile phones, spreading across multiple high-growth sectors, each reinforcing the country’s industrial strength and economic diversification^[4][5]:

• The electronics and semiconductor industry, valued at $115 billion as of 2024, is on a trajectory to more than triple by 2026 due to strong domestic consumption and export demand backed by initiatives such as the ₹76,000 crore Semicon India Programme. The embedded microcontrollers and system-on-chip (SoC) technologies powering a large variety of electronics further anchor this sector’s future growth.
• The automotive and electric vehicle (EV) segments have witnessed over 10% growth in production, reflecting booming demand and significant investments from global players including Tesla and Ford. India is rapidly becoming a strategic EV production hub, supported by expanding battery manufacturing and component supply chains.
• The pharmaceutical and chemical industries continue to expand their footprint with increased exports and foreign direct investment, leveraging India’s skilled workforce and cost competitiveness.
• The basic metals, machinery, and electrical equipment manufacturing sectors have shown solid growth, driven by domestic infrastructure projects and industrial activity, contributing range-bound growth from 6% to over 20% in specific sub-sectors.
• Textile and garment manufacturing is witnessing a resurgence as global fashion brands pivot sourcing towards India, attracted by available skilled labor and raw material resources.

Across these sectors, India’s Index of Industrial Production (IIP) and Manufacturing PMI demonstrate robust health and expansion, with the manufacturing PMI reaching a 17-year high in July 2025 at 59.2, supported by rising domestic and export orders, employment growth, and technological adoption^[5].

Effect on Economy

These manufacturing developments directly enhance India’s economic richness in multiple ways:

Firstly, India’s consumer base benefits. The rise in local manufacturing, particularly in technology products like the iPhone, has already led to price moderation in premium goods thanks to lower import duties on domestically produced items. As production scales, broader availability and affordability of quality manufactured goods improve the purchasing power of India’s expanding middle class.

Secondly, these manufacturing sectors together function as powerful engines of economic growth and job creation. The massive inflows of foreign direct investment exceeding $15 billion in 2023-24, combined with vibrant government incentives such as the Production Linked Incentive (PLI) schemes and regional industrial policies, radically boost India’s industrial resilience and skilled workforce development.

Finally, and critically, India’s export profile is undergoing a transformation. It is emerging as a major global supplier of high-value, technologically sophisticated manufactured goods across multiple industries, improving the country’s trade balance and economic stature. India’s growing role as a top-exporter to key global markets, including the US for electronics, automotive components, pharmaceuticals, and textiles, reflects the success of its strategic policies to incentivize and expand domestic manufacturing.

Conclusion:

India’s rise as a global high-tech manufacturing hub, especially for premium products like the iPhone, along with its increasing strength in diversified manufacturing sectors, signals a dynamic and balanced economy evolving beyond its traditional services-led identity. This multi-sectoral manufacturing growth represents a robust foundation for sustainable economic prosperity, showcasing India not only as a consumer of global innovation but increasingly as an innovator, producer, and exporter at the highest echelons of industry worldwide.

References:

1. https://telanganatoday.com/apple-ramps-up-iphone-production-in-india-to-record-high-in-h1-2025
2. https://economictimes.com/industry/cons-products/electronics/apple-harvests-record-iphone-output-from-its-india-orchard/articleshow/122590172.cms
3. https://www.reuters.com/world/china/apple-aims-source-all-us-iphones-india-pivot-away-china-ft-reports-2025-04-25/
4. https://www.evolute.in/blog/top-10-fastest-growing-sectors-in-the-manufacturing-industries-in-india-2025/
5. https://www.india-briefing.com/news/india-manufacturing-tracker-2024-25-33968.html/