From opening up to building up: India's next Industrial revolution

The Modi government recognised that if India was to become a developed economy, the state could not remain the principal actor in every strategic industry. It had to become an enabler, creating the policy architecture, incentives and infrastructure that would allow private capital and entrepreneurship to take India's capabilities to scale.

Some economic reforms deliver immediate results. Others alter the structure of an economy and create opportunities whose full potential is realised over decades. The Narendra Modi government’s decision to open strategic, technology-intensive sectors to private enterprise belongs to the latter category.

For decades, sectors such as space, aerospace and advanced electronics operated largely within a government-led framework. Private industry had limited room to build capabilities, invest at scale or compete globally. The Modi government recognised that if India was to become a developed economy, the state could not remain the principal actor in every strategic industry. It had to become an enabler, creating the policy architecture, incentives and infrastructure that would allow private capital and entrepreneurship to take India’s capabilities to scale.

That shift is now beginning to produce a new industrial ecosystem across space, semiconductors, data centres, electronics, solar manufacturing and aerospace.

The scale of the opportunity is striking. A recent Jefferies assessment of India’s emerging industrial revolution points to a space economy that could expand to around USD 45 billion by 2030, a data-centre investment opportunity of roughly USD 45 billion, around USD 20 billion already invested in semiconductors with another USD 13 billion incentive plan, and the potential to localise around 90% of the solar manufacturing value chain by the end of the decade. Electronics and aerospace are creating equally significant opportunities as India moves deeper into manufacturing and global supply chains.

These numbers should not simply be added together, because they represent different segments and time horizons. But they make one point unmistakable: India is simultaneously creating several new, multi-billion-dollar industrial ecosystems.

The space sector is perhaps the most visible example of what happens when government policy meets private enterprise. The decision to open space to private participation in 2020 fundamentally changed the character of the industry. Start-ups such as Skyroot, Agnikul, Pixxel and Digantara are now developing launch vehicles, satellites, earth-observation capabilities and other technologies that were once almost exclusively the preserve of the public sector. India’s space economy is projected to grow from around USD 8.4 billion to approximately USD 44 billion by 2033, including an estimated USD 11 billion in exports.

The significance goes beyond the numbers. India is developing an indigenous commercial space ecosystem in which public-sector technological capabilities can be combined with private capital, innovation and speed. The same model is being replicated in other strategic sectors.

Semiconductors are particularly important because they lie at the heart of modern industry. Automobiles, smartphones, telecommunications, artificial intelligence, defence systems and industrial machinery all depend on them.

India’s semiconductor push is therefore not simply about manufacturing chips; it is about building an entire ecosystem encompassing fabrication, packaging and testing, chip design, materials, equipment and ancillary industries. The approximately USD 20 billion already committed to the sector, alongside a further USD 13 billion incentive programme, represents the beginnings of a domestic capability in an area where excessive import dependence has long been a strategic vulnerability.

Electronics demonstrates why this approach can work. India’s electronics production has risen from about 1.9 lakh crore in 2014-15 to 13.11 lakh crore in 2025-26, while electronics exports have grown from roughly 38,000 crore to 4.24 lakh crore. Mobile-phone exports have risen from around 1,500 crore to approximately 2.59 lakh crore. India has moved from importing most of its mobile phones to becoming a net exporter, with the overwhelming majority of phones sold domestically now manufactured in India.

This is the trajectory that matters: manufacture domestically, deepen the component ecosystem, achieve scale and then compete globally.

Data centres represent another frontier. India’s colocation capacity has already expanded dramatically and could grow from around 2 GW to 5-10 GW over the coming years, creating a potential USD 45 billion investment opportunity across power, cooling, construction, networking and digital infrastructure. As artificial intelligence, cloud computing and digital services expand, India’s advantages in engineering talent, digital adoption and relatively competitive costs can turn the country into a major regional digital-infrastructure hub.

Solar manufacturing adds an equally important strategic dimension. Building domestic capacity across the solar value chain reduces exposure to imported components while creating an industry capable of serving rapidly growing markets beyond India. With localisation of as much as 90 percent of the solar manufacturing value chain targeted by 2030, India can turn energy security into an export opportunity.

Aerospace offers perhaps the clearest bridge between manufacturing capability and global trade. India possesses a large pool of engineering talent and a cost advantage that is increasingly attractive to global aerospace companies. Indian firms are already supplying components to global manufacturers such as Boeing and Airbus. As global companies diversify their supply chains, India has an opportunity to move from being a supplier of individual components to becoming an increasingly important aerospace manufacturing and engineering hub.

The common thread running through all six sectors is scale. India’s domestic market provides something few countries can match: a massive demand base in which technologies can be deployed, tested and refined before being taken abroad.

That creates a particularly powerful opportunity in the Global South. Countries across Africa, Southeast Asia, the Middle East and Latin America are looking for technologies that are not merely sophisticated, but affordable, reliable and proven at scale. India is uniquely positioned to meet that demand.

The opportunity is not simply to export products. It is to export solutions designed around the realities of emerging economies, whether affordable satellites and space applications, solar technologies, electronics, digital infrastructure, aerospace components or semiconductor-related products and services.

This is where the idea of Atmanirbhar Bharat acquires a larger meaning. Self-reliance does not mean closing the doors to the world. It means acquiring the capabilities to compete with the world. The objective is not merely to replace imports but to build products and technologies that are competitive enough to win markets abroad.

There is a natural progression: import substitution creates domestic capability; domestic capability creates scale; scale lowers costs; lower costs improve global competitiveness; and competitiveness drives exports.

That is how an industrial ecosystem becomes an economic advantage.

The most visionary aspect of the Modi government’s reforms is therefore not any individual incentive or scheme. It is the decision to change the role of the state itself, from being the dominant participant to becoming an enabler of private investment, innovation and competition.

One reform creates another opportunity. Semiconductor manufacturing strengthens electronics. Electronics creates component ecosystems. Data centres drive demand for power, cooling and networking. Space develops capabilities in propulsion, materials, avionics and satellites. Aerospace builds precision engineering that can spill over into defence and advanced manufacturing. Solar manufacturing strengthens both energy security and export capacity.

The benefits compound.

And that is precisely what India needs on the journey towards Viksit Bharat 2047. A developed India cannot be built on consumption alone. It requires manufacturing depth, technological capability, private investment, skilled employment, infrastructure and the ability to produce competitively for global markets.

The decision to open these six sectors to private enterprise was therefore far more than a change in regulation. It was a visionary and progressive structural reform, one that recognised early that the India of the 21st century would have to move from being a large market for global products to becoming a major producer and exporter of globally competitive technology.

The dividends are already beginning to emerge, but the larger payoff will come over the next two decades.

India is not merely becoming more self-reliant. It is becoming more capable, more competitive and increasingly indispensable to global supply chains.

That is the real promise of India’s new industrial revolution and one of the most consequential building blocks on the road to Viksit Bharat 2047.

Amit Malviya is the Sah Prabhari of BJP West Bengal and a member of the national executive.

(Views expressed in this opinion piece are those of the author)

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