Policy Brief No. 223 — February 2026
India’s Industrial Evolution and Global Value Chains: From Autarky to Aspiration S. Yash Kalash, Vaman Desai and Karishma Maniar Shah
Key Points → Global supply chains are being reconfigured due to COVID-19 disruptions, US-China trade tensions and geopolitical decoupling. → India is emerging as a credible alternative to China in global production networks due to its scale, policy reforms, digital infrastructure and demographic dividend. It has progressively moved toward export-led growth and foreign direct investment (FDI) facilitation. The emphasis is on supply chain resilience, technology partnerships and sustainability. → India has strong global value chain (GVC) presence in services. Manufacturing integration remains weak due to the lack of lead firms, limited component ecosystem and import dependence. However, there is promising growth in electronics, pharma and engineering goods. → Industrial growth is at an inflection point. With coordinated reforms and strategic partnerships, India can become a central node in global production. The transition requires systemic policy alignment, institutional coherence and commitment to innovation-driven growth.
Introduction: The Global Industrial Moment and India’s Emerging Role The international industrial landscape is undergoing a profound transformation. Disruptions to global supply chains exacerbated by the COVID-19 pandemic, geopolitical tensions, trade wars and strategic decoupling between major economies such as the United States and China have triggered a realignment of GVCs. This reconfiguration has created new pressures as well as fresh opportunities for emerging economies seeking to reposition themselves within the global production architecture. Among these, India is gaining prominence as a potential alternative manufacturing hub and digital-industrial platform. As multinational firms diversify production networks away from a historically China-centric model, India’s scale, large consumer base, policy reforms and digital infrastructure have captured the attention of global investors and strategists. However, India’s industrial ascent must be understood in the context of its historical trajectory. The country’s economic model, initially rooted in post-colonial selfreliance, and protectionism, has evolved through phases of structural transformation, policy liberalization and