Archive · 21 Aug 2026
India’s Manufacturing Sector Struggles to Create Enough Jobs
India has many young people who need jobs.
An expert says factories have not created enough work for them.
He wants India to adopt a clear plan to build more manufacturing industries.
He also questioned whether the current Production Linked Incentive scheme will create many jobs.
This is because most of its sectors use a lot of machines and money rather than large numbers of workers.
Other economists said India still needs industries such as clothing and toy making.
They warned that artificial intelligence could reduce job growth in some service industries.
India must therefore expand manufacturing while making sure automation does not reduce employment opportunities.
Manufacturing has not created enough jobs to match India’s growing young workforce, economist Mehrotra said.
Mehrotra called for an explicit industrial policy and manufacturing strategy to expand employment.
He questioned whether the Production Linked Incentive scheme can generate enough jobs because 12 of its 14 sectors are capital-intensive.
Economists warned that relying on services and Global Capability Centres could limit future job growth as artificial intelligence changes service work.
Manufacturing’s share of gross value added has declined to 14.3%, while labour-intensive jobs have only recently returned to 2012 levels.
- Who
- Economist Mehrotra and economist Abheek Barua discussed India’s employment challenge.
- What
- They said manufacturing has not generated enough jobs and warned that services, automation and artificial intelligence may not provide sufficient future employment.
- When
- The discussion took place during a session; the articles do not specify the date.
- Where
- The location is not specified in the article.
- Why
- India needs more employment for its large young workforce and labour surplus.
- Manufacturing share of gross value added
- 14.3%, down from around 16–17%
- Production Linked Incentive sectors
- 12 of the scheme’s 14 sectors were described as capital-intensive
- Labour-intensive manufacturing jobs
- They declined for about a decade and have only recently recovered to 2012 levels
- Industries identified as job-intensive
- Garments and toys
- Employment concern in services
- Artificial intelligence may limit job growth in services exports and Global Capability Centres
- Policy recommendation
- Adopt an explicit industrial policy and manufacturing strategy