India’s Manufacturing Makeover: Deeptech, Policy Fuel the Next $10 Trillion Leap

Amid global supply chain realignments and rising geopolitical shifts, India is rapidly positioning itself as a deeptech-driven manufacturing powerhouse. Backed by strategic policies like the Production-Linked Incentive (PLI) scheme, expanding infrastructure, and a surge in automation and IP-led innovation, the country is moving beyond low-cost production to emerge as a hub for semiconductors, electronics, aerospace, and sustainable energy solutions.

This transformation could propel India’s manufacturing value from $459 billion to $1.6 trillion by 2034, anchoring its ambition of becoming a $10 trillion economy, according to a report shared by venture capital firm 3one4 Capital.

According to the report, by 2023 sectors such as semiconductors, electric vehicles and defence are estimated to post growth ranging from 2.8 times to even 12 times of their current market size.

"Manufacturing is set to play a central role — with projections indicating a 2.4x growth in GVA by 2030E, adding $7.5 trillion in value and contributing over 32% of incremental GDP," it says.

However, this growth realisation will depend on complementary investments in design, engineering, and enablement infrastructure.

The report says formalisation of economy through GST and UPI, shift in global supply chains and reverse brain drain is giving a fillip to manufacturing innovation in the country along with opening new export opportunities.

India’s manufacturing ecosystem has evolved across three distinct phases—starting with horizontal B2B marketplaces, moving into vertical, export-oriented platforms, and now entering a new phase focused on IP driven and solution-led manufacturing, the report says. "This shift reflects growing sophistication, with startups and scale-ups moving beyond distribution to building high-value, innovation-centric manufacturing capabilities."

The report highlighted the rapid growth in India's electronics manufacturing ecosystem and the country's progress in high-value manufacturing in the sector. It says India has a window of opportunity to shift from being a low-cost contract manufacturer to a global hub for smart, design-led electronics production.

"India is transitioning from a pure assembly destination to a full-stack electronics manufacturing hub. With strong government support through the PLI schemes, chip design incentives, and Electronic Manufacturing Clusters (EMCs), the country is building out capabilities in PCBA, embedded software, and component production. Indian startups are complementing this push by offering solutions in test automation, factory analytics, and vertical SaaS for production planning," the report says.