Manufacturing and jobs: is India different?

In recent years, there has been widespread debate on India’s perceived failure to industrialise to the same extent as East Asian and other countries. Against this backdrop, this paper reviews the different dimensions and trends in the manufacturing sector, particularly in terms of employment. The paper highlights that, although manufacturing in India lags behind that in other countries, there is considerable variation within the sector across segments and states. Moreover, Indian manufacturing has been—and will continue to be—particularly skill- and capital-intensive. It is clear that a range of economic and regulatory factors are interacting to determine the nature of production and employment in the sector. In response, a broader industrial policy is required to promote a competitive manufacturing sector that creates decent employment.