BT India @ 100: 'India’s manufacturing story bigger than 16% GDP', says Sanjeev Sanyal

BT India @ 100: India’s manufacturing progress cannot be measured solely by its share of GDP, Sanjeev Sanyal, member of the Economic Advisory Council to the Prime Minister, said at Business Today’s India@100 session. Speaking to Business Today’s Siddharth Zarabi during a discussion on building a resilient economy, Sanyal highlighted India’s expanding industrial capabilities and emerging opportunities across sectors.

‘Manufacturing is growing’: Sanyal dismisses 16% GDP concern

Responding to concerns that manufacturing continues to account for around 16% of India’s GDP, Sanyal said the figure does not capture the sector’s expansion in absolute terms.

“Pure manufacturing, which is 16% of GDP. Do remember that it is a relatively stable proportion of a rapidly growing economy, which means that the sector is growing,” Sanyal said. “This idea that it’s not growing by looking at proportions makes no sense because the overall economy is growing.”

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He added that India’s manufacturing capabilities are “radically bigger” than they were a decade ago, with the sector’s composition also changing significantly.

India, he said, has emerged as a major player in sectors such as steel, electronics and solar-panel manufacturing. While China produces around 960 million tonnes of steel annually, India is the second-largest producer with about 160 million tonnes, compared with roughly 80 million tonnes produced by the US, Sanyal said.

He also noted that India is now the world’s second-largest producer of mobile phones, a sector that was largely absent in the country a decade ago.

Shipbuilding seen as next major opportunity

Sanyal identified shipbuilding as an emerging area with significant potential. He said India has the necessary ingredients for the sector, including steel, a young workforce, a coastline, design capabilities and domestic demand.

“More than 90% of our imports and exports is carried on foreign ships. It is our single biggest geopolitical vulnerability,” he said, warning that dependence on foreign shipping lines could pose a serious economic risk.

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According to Sanyal, recent policy changes—including granting infrastructure status to shipping and improving access to long-term finance—have already begun to revive the industry. Indian shipyards, he said, are receiving orders several years in advance, while global companies such as Hyundai and Mitsubishi have shown interest in building ships in India.

“Within five, six years, we will emerge as a serious number four player,” Sanyal said.

‘Build at the cutting edge’: Sanyal’s call for innovation

Sanyal said global supply chains have shifted from a “just in time” model to “just in case” as countries reassess risks after the Covid crisis and other disruptions.

He argued that India must move beyond importing technology or relying primarily on joint ventures. “At some point, we’ve got to have the confidence of going out there and building at the cutting edge,” he said.
According to Sanyal, India’s manufacturing future will depend not only on policy reforms but also on a cultural shift towards risk-taking, innovation and original research.

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