By D.V.Manjunatha
India is at a decisive moment in its economic journey. Global supply chains are being rebuilt, energy systems are being redesigned, and manufacturing hubs are being re-evaluated. For a country with India’s talent pool and domestic demand, this shift presents a once-in-a-generation opportunity. But capturing it requires more than sector-specific schemes, it needs a unified, simplified industrial framework that rewards companies for building real value within the country. For years, the attempts have been in the right direction. It’s now time to revisit the work done and optimise it further as per the evolving needs of the India Inc.
That is the premise behind proposing a National Domestic Value-Addition Acceleration Programme (NDVAP). It is a straightforward idea, instead of offering incentives based on applications or narrowly defined product categories, reward manufacturers purely on the extent of value they create in India. In many ways, it is the most natural evolution of India’s ongoing push toward self-reliance and globally competitive manufacturing. How this will work, let me elaborate.
A framework designed for depth, not just scale
NDVAP can operate on a tiered system. As a company increases its domestic value addition – through localisation of components, materials, engineering processes, and supporting ecosystems – it moves up the incentive ladder. This aligns with how genuinely competitive manufacturing economies are built, not on imported inputs or low-value assembly work, but on layers of domestic capability. For India, this shift could not be more critical.
In India, manufacturing currently accounts for about 15% of our GDP. A move toward 20% which NDVAP can help accelerate, imagine the unlock it can accelerate ranging trillions of rupees in fresh output, creating deeper industrial linkages, and power sustained economic growth. Equally important is the impact on jobs that will come with it. Manufacturing-led economies generate long-term employment opportunities across engineering, tooling, materials processing, testing, logistics, and skilled trades. The NDVAP framework has the potential to catalyse at least 35–50 lakh such jobs, giving India’s demographically young workforce meaningful pathways into the industrial economy.
A competitive edge for India’s manufacturing base
One of the biggest challenges for Indian manufacturers has been the fragmented supply-chain landscape. Many sectors-from electronics to machinery to chemicals-continue to depend heavily on imported components. This raises costs, increases vulnerabilities, and limits the ability to become export-competitive. A national value-addition programme tackles this head-on. When manufacturers are rewarded for sourcing and producing within India, the economics shift. Local vendors scale up. Component fleets expand. Engineering capability deepens. These improvements, taken together, help Indian factories operate at global cost and quality benchmarks. As global companies rebalance supply chains away from single-country dependence, a framework like NDVAP positions India as a strong, reliable, large-scale alternative, one that can offer both market access and genuine manufacturing depth.
Transforming India’s upstream industrial capabilities
The need for deeper value addition is visible across multiple industries. Take electronics sub-assemblies, industrial castings, motors, control systems, machinery parts, engineered plastics, speciality chemicals, or even advanced materials and that data will tell you that India still imports a significant share of these inputs. How can we impact this segment with the framework? This is how we can answer the question. Under NDVAP, manufacturers would be incentivised to localise:
- Components for electronics, appliances, and consumer goods
- Precision parts for automotive and industrial machinery
- Industrial chemicals, coatings, composites, and engineered materials
- Tooling, moulds, dies, and high-accuracy machining
- Automation systems, robotics, and process equipment
For our ‘Make In Ambitions’ to fructify, building these upstream capabilities is not optional, it is foundational. It will reduce cost volatility, strengthen supply-chain security, and allow Indian manufacturers to compete for global contracts and export markets better.
What the world has already proven
NDVAP is may seem new in its structure, but not in its spirit. Countries that built global manufacturing strengths have followed similar principles -reward domestic depth and prioritise supply-chain localisation.
China is the clearest example. Its rise in sectors like solar, electronics, and batteries came not from assembly-line incentives alone, but from policies that encouraged companies to develop local ecosystems of materials and components. The result: unmatched industrial resilience and export leadership.
Vietnam followed a comparable path in electronics. Its value-addition-based benefits helped draw companies like Samsung, gradually transforming the country from an assembly destination into a significant exporter of high-tech components.
Mexico adopted a similar playbook for its automotive sector, linking incentives to local content and helping build one of the most robust supply chains in the Americas. India now has the chance to adapt these global lessons to its own scale and strengths.
India needs a policy that matches India’s ambition
In my 30 years of experience and how I have seen the Indian manufacturing landscape shape over the three decades, I believe that something like the NDVAP can be a breakthrough in public policy: a framework that is easy to understand, straightforward to administer, and powerful in its long-term impact. It encourages companies to manufacture more at home, supports MSMEs that form the backbone of any industrial economy, strengthens the rupee by reducing import dependence, and accelerates India’s transition into a globally competitive manufacturing nation. If India missed earlier industrial waves, we now stand before the largest one yet-shaped by clean energy, digital infrastructure, advanced materials, and global diversification. A programme like NDVAP ensures that India doesn’t just participate in this wave but leads it.