Blitz Bureau
NEW DELHI: Every Indian industrial policy of the last thirty years has raised output. The structural question, unchanged across all of them, is who owns the value in between.
Strip the day’s announcement of its occasion and one permanent problem remains, older than any government and unlikely to be settled by any single one. India assembles a great deal and owns comparatively little of what it assembles. A phone made in Noida may contain a display from one country, a processor designed in a second and fabricated in a third, a camera module from a fourth and a battery cell from a fifth. The assembly is real work and real employment. But the margin, and the pricing power, sit with whoever owns the scarce link — and scarcity in modern manufacturing lives in design, in process technology and in materials, not in final assembly.
This is why the Prime Minister’s manufacturing stream was phrased as it was: not produce more, but build the whole chain, from small components to finished products, covering design, technology, components and scale. It is also why the same address spent time on semiconductors and critical minerals, which are the two ends of the same argument. Semiconductors are the scarce process; critical minerals are the scarce input. A country that imports both has capped how much of its own manufacturing value it can retain, no matter how large its factories become.
The permanent question: assembly creates jobs, but the margin sits with whoever owns the scarce link — design, process technology or materials.
India assembles a great deal and owns comparatively little of what it assembles. That is the sentence a decade of policy is trying to delete.
At a Glance
• The structural gap: assembly capacity ahead of design and component capacity
• Where margin sits: the scarce link — design, process technology, materials
• Stated goal: complete domestic value chains, design to finished product
• The scarce process: semiconductors — three plants operational, five to eight more envisaged
• The scarce input: critical minerals, addressed through the National Critical Minerals Mission
• Named priorities: cost, quality and skill
• Quality standard invoked: zero-defect, precision manufacturing as an Indian identity
• The constraint: each missing link raises the cost of every link that depends on it
• NITI Aayog focus sectors (Aug 2026): chemicals, textiles, telecom and networking equipment, solar photovoltaics
Two things make this a genuinely hard problem rather than a matter of willpower. The first is that value chains are circular. A component maker will not invest without an assured buyer; an assembler will not commit to a domestic supplier without proven quality; quality comes from volume, and volume comes from the commitment neither party will make first. Somebody has to break the circle, which is what production-linked incentives were designed to do and why their real test is what happens when the incentive expires. The second is talent. Process engineering, materials science and design capability are built over a professional generation, not a policy cycle — which is the honest link between a manufacturing target and a skilling pledge, and the reason the two appeared in the same speech.
The constructive case is that India has broken this circle before, in narrower fields. Pharmaceutical formulations, automotive components and, more recently, mobile-handset assembly all moved from import dependence to export capacity within a decade or so, each time by combining a protected home market with an export discipline that forced quality upward. NITI Aayog’s own sectoral work this month points to chemicals, textiles, telecom and networking equipment and solar photovoltaics as the next candidates. The lesson from the successful cases is consistent and unromantic: pick a small number of chains, stay with them past the first disappointing year, and measure success by the share of the product’s value that stays in India — not by the number of units that leave the gate.
