Centre mulls private sector leadership for National Manufacturing Mission

One of the key conversations underway between the government policy think tank Niti Aayog and industry leaders is over the ideal profile of the NMM’s chief—whether the mission would benefit more from bureaucratic experience or private-sector execution capability, two people aware of the matter said.

Announced in the Union budget for FY26, the mission is part of a broader push to reposition manufacturing and micro, small and medium enterprises (MSMEs) as twin engines of the economic growth. The mission aims to not just boost industrial output but also reduce import dependence, support green manufacturing, and improve ease of doing business for small and mid-sized firms. 

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The finance minister Nirmala Sitharaman’s announcement did not detail the implementation roadmap or total outlay for the mission, both of which are currently being worked out.

Another issue under discussion is the mission’s governance structure—specifically, whether it will include regulatory oversight to track the progress of participating firms.

“Given the scale and complexity of transforming India into a global manufacturing hub, the question of who leads the mission is not just procedural—it is strategic," said Vinod Kumar, president, India SME Forum, an MSME industry association. 

Kumar added that effective leadership would be key to aligning ministries, encouraging industry participation and resolving policy and infrastructure bottlenecks in real time.

In her budget speech, finance minister Nirmala Sitharaman had said manufacturing and MSMEs would be central to India’s growth strategy in the coming years. The NMM is expected to provide targeted policy support and create execution roadmaps for small, medium and large manufacturing firms across priority sectors. 

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The push comes at a time when India’s manufacturing share of GDP has stagnated at 15-17% for years, despite initiatives such as the Make in India programme and production-linked incentive schemes. 

“The goal of the Make in India initiative was to raise the share of manufacturing in the country's economic output to 25% by 2022, a target that has remained unmet," a December 2024 report by KMPG said.

Manufacturing contributed to 14% of the nominal gross value added in FY25, as per a statistics ministry statement on 28 February.

The mission will also prioritize green manufacturing, with incentives aimed at expanding domestic production of solar PV cells, electric vehicle batteries, wind turbines, electrolyzers, grid-scale batteries and high-voltage transmission equipment.

One of the mission’s major components is supporting MSMEs, which account for about 30% of India’s manufacturing output. There are over 60 million MSMEs registered on the government’s Udyam portal, of which around 13 million are in manufacturing as of 6 May.

MSMEs have long been a focus for the government, especially since the pandemic-induced slowdown in 2020. They also remain a large employment generator, with government estimates suggesting the sector supports over 200 million jobs.

A Niti Aayog report earlier this week highlighted that India's MSMEs lack technological prowess and struggle with quality control for the products they make. They are also heavily dependent on credit and the lack of formal sources of credit has an adverse impact on their growth, the report published on 2 May said. 

“Only 19% of MSME credit demand was met formally by FY21, leaving an estimated ₹80 lakh crore unmet," the report stated. 

Kumar also emphasized the need to ease regulatory burdens for MSMEs working in critical sectors such as energy, aviation, mobility and healthcare.

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To address both competitiveness and sustainability, the government is also developing a “green MSME" scheme, aimed at helping small manufacturers decarbonize through targeted incentives, Mint reported on 6 January this year.

Policy urgency around NMM has also been shaped by global trends, including tariff wars and shifting supply chains, as countries double down on domestic capacity to reduce import dependence. India, too, is trying to reposition itself as a global alternative to China in key sectors.