ECONOMY – The Recomposition of India’s Industrial State since China’s Accession to the WTO (2001-2026): From Manufacturing Emergence to Geoeconomic Power
François Souty, PhD
Lecturer in geopolitics at Excelia Business School, La Rochelle and Paris-Cachan
Lecturer in EU competition law and policy at the Faculty of Law of Nantes
Head of the economics section at Le Diplomate Média
« Come, make in India. Sell anywhere, but manufacture here. » *
Narendra Modi, « Make in India« initiative launch speech , Vigyan Bhawan, New Delhi, September 25, 2014.
« We cannot predict the future. We can only create it. »
Peter Drucker, Management Challenges for the 21st Century, New York, Harper Business, 1999[1]
Executive Summary
China’s accession to the World Trade Organization in December 2001 has profoundly transformed international industrial balances. While this development has led the major developed economies to adapt their industrial policies in order to preserve their competitiveness and technological autonomy, it has placed India in a unique situation. Unlike Japan, South Korea or Taiwan, which already had a largely consolidated manufacturing base, India had to pursue its own industrialization in a global environment now dominated by China’s industrial boom.
We show that this new geoeconomic configuration has not led India to give up its manufacturing ambitions. On the contrary, it has promoted the gradual reconstruction of a strategic State mobilizing increasingly diversified industrial policy instruments in order to accelerate industrial development, strengthen national technological capacities, attract international investment and reduce dependencies in sectors considered strategic. It highlights the evolution of this industrial policy from the early 2000s until 2026. We successively analyse the effects of the Chinese emergence on the Indian economy, the gradual reconstruction of a strategic state from the mid-2010s, the affirmation of an industrial policy now oriented towards technological sovereignty, economic security and critical technologies, before drawing out the main comparative lessons.
It seems strong that India is not seeking to reproduce the Chinese model, nor to extend the trajectories followed by Japan, South Korea or Taiwan. It is gradually building an original configuration of the industrial state, based on the combination of a vast internal market, exceptional demography, an open economy, targeted support for priority sectors and increasing integration into global value chains.
This trajectory is of particular interest for contemporary reflections on the renewal of European industrial policy. It shows that trade openness remains compatible with a development strategy based on the definition of industrial priorities, the mobilization of public financing, the strengthening of national technological capacities and the securing of supply chains. In this respect, the Indian experience offers several lessons that could feed into European debates on competitiveness, economic sovereignty and industrial partnerships, particularly with a view to strengthening economic relations between the European Union and India. Beyond the Indian case alone, this study is part of a more general reflection devoted to the contemporary transformations of the industrial state in the face of globalization, the rise of economic security and the shift of the center of gravity of the world economy towards Asia.
Introduction
China’s entry into the World Trade Organization (WTO) on December 11, 2001, was one of the major turning points in the contemporary world economy. In the space of two decades, the People’s Republic of China has established itself as the world’s leading manufacturing power, profoundly transforming international value chains, trade and industrial balances. This change has led many developed economies to revise their industrial policies in order to preserve their competitiveness, technological autonomy and, more recently, their economic security.[2]
For India, a founding member of the WTO since 1995, however, the challenge is presented in significantly different terms. While Japan, South Korea and Taiwan already had a largely consolidated industrial base at the time of China’s emergence, India was still pursuing its own economic transition initiated by the 1991 reforms. Its ambition was not to preserve an acquired industrial leadership, but to build a manufacturing base capable of supporting the development of an economy that is destined to become the most populous in the world. This singularity gives the Indian case a particular scope: it is not a question of adapting an existing industrial power to a new competitive environment, but of conducting large-scale industrialization in a world economic order already deeply structured by the rise of China.
This situation also invites us to go beyond a reading based exclusively on manufacturing performance. As Amartya Sen observes, development cannot be reduced to economic growth alone; it consists above all in a process of expanding real freedoms and human capacities.¹ Industrial policy is therefore not an end in itself, but one of the instruments for sustainably supporting investment, innovation, skilled employment, technological diffusion and, more broadly, economic and social development. The originality of India’s trajectory lies precisely in the search for a balance between these human development requirements and the need to strengthen the country’s industrial, technological and productive capacities.
Since the early 2000s, and even more so from the mid-2010s, this dual ambition has gradually led the Indian authorities to rebuild a strategic state capable of directing investments, supporting innovation, promoting the emergence of priority industrial sectors and integrating the national economy more closely into global value chains.
The hypothesis defended in this study is that China’s industrial boom has not led India to give up its manufacturing ambitions. On the contrary, it has helped to accelerate the reconstruction of an ambitious industrial policy, now based on technological sovereignty, the resilience of supply chains, international competitiveness and the creation of industrial jobs. The Indian state does not seek to reproduce the Chinese model; It is gradually developing an original trajectory combining economic opening, targeted support for strategic sectors, enhancement of a vast internal market and mobilisation of its demographic potential.
The study of this evolution is of double interest. On the one hand, it allows us to better understand the contemporary transformations of the strategic state in a large emerging democracy faced with competition from the world’s leading manufacturing power. On the other hand, it offers several lessons likely to shed light on the reflections carried out within the European Union on the renewal of industrial policy, the definition of strategic priorities, the securing of value chains and the link between trade openness and economic autonomy. At a time when the negotiations on a free trade agreement between the European Union and India are experiencing a new dynamic, the Indian experience deserves special attention.
In this perspective, it will be necessary to analyze successively the foundations of an industrial policy confronted with the Chinese challenge (I), the gradual reconstruction of a strategic state from the mid-2010s (II), the affirmation of an industrial policy now oriented towards technological sovereignty and economic security (III), before drawing out the main comparative lessons, both with regard to Japanese experiences, Korean and Taiwanese than open prospects for European industrial policy (IV).
I. The Foundations of the Recomposition of the Indian Industrial State in the Face of China’s Accession to the World Trade Organization (2001-2014)
China’s emergence as the world’s leading manufacturing power is one of the main factors explaining the gradual recomposition of India’s industrial policy during the first quarter of the twenty-first century. Although the economic reforms undertaken from 1991 onwards had already profoundly changed the country’s development mechanisms, they had not yet led to the emergence of a real strategic state capable of directing the industrial transformations of the economy in the long term. China’s accession to the World Trade Organization in December 2001 profoundly changed the conditions under which India must now pursue its economic development. The spectacular rise of Chinese industry, the reorganization of global value chains, the acceleration of international direct investment and the increasing concentration of manufacturing capacity in East Asia are gradually leading the Indian authorities to reassess the foundations of their development strategy.[3]
However, this evolution is not the result of an immediate reaction or a brutal doctrinal break. It is the result of a growing awareness of the limits of a model based mainly on services and a renewed reflection on the place of industry in India’s long-term growth, employment, innovation, economic security and international affirmation. The Indian state is thus undertaking, in successive stages, a recomposition of its economic intervention instruments that will pave the way for the more ambitious reforms undertaken from the mid-2010s.[4]
The analysis of this first phase thus leads to a successive examination of the particular situation of the Indian economy at the time of China’s accession to the World Trade Organization (A), the consequences of China’s manufacturing emergence on India’s industrial and trade balances (B), before studying the first changes in industrial policy that herald the gradual reconstruction of a true strategic state (C).
A. An economy still in transition when China joins the World Trade Organization
China’s accession to the World Trade Organization on 11 December 2001 comes at a time when the Indian economy is still undergoing the profound transformation initiated by the liberalization reforms of 1991. After several decades of a widely administered model of licensing (Licence Raj), economic planning and tight investment controls, India has gradually begun to open up its economy in order to restore competitiveness, attract foreign capital and promote more sustained growth.
This situation is largely the result of the economic choices made since independence. Under the leadership of Jawaharlal Nehru, India had favoured a mixed economy model in which the state played a central role in development planning, the creation of large state-owned enterprises and the creation of a heavy industrial base. Inspired both by post-war Western experiences and by certain forms of planning, this strategy allowed the establishment of significant scientific, academic and industrial capacities, but was also accompanied by a particularly restrictive administrative framework for economic activity. The Raj License system, gradually built up over the decades, severely limited entrepreneurial initiative, private investment and competition, while slowing down the modernization of the productive apparatus. The reforms undertaken from 1991 onwards did not mark an absolute break, but a profound reorientation of a State that remained a major player in economic development.[5]
The effects of this liberalization are quickly apparent. During the 1990s and early 2000s, gross domestic product growth accelerated, foreign direct investment increased, exports diversified, and several technology-intensive sectors, including computer services, software, and information technology, experienced remarkable development. India is gradually becoming one of the world’s leading digital service centers, benefiting from a combination of a highly skilled workforce, a large pool of engineers, and a wide diffusion of the English language in international economic activities.[6]
However, this success should not mask the persistent fragility of the productive apparatus. Unlike Japan, South Korea or Taiwan, the manufacturing industry remains relatively limited in terms of both national wealth creation and employment. Its contribution to gross domestic product has increased slightly, while a large proportion of the working population is still employed in low-productivity agriculture. The Indian economy thus presents an original configuration in which the service sector is experiencing a rapid rise in power without this being preceded by a manufacturing industrialization comparable to that observed in most Asian economies. This singularity feeds an important doctrinal debate on the existence of a form of « premature disindustrialization » or, more precisely, of an industrialization that has remained incomplete.[7]
In addition to these sectoral characteristics, there are significant institutional constraints. Although the reforms undertaken since 1991 have considerably reduced the obstacles to private initiative, they have not yet led to the emergence of a strategic state comparable to those that have gradually asserted themselves in Japan, South Korea or Taiwan. Industrial policies remain fragmented between the EU and the federated states, transport, energy and logistics infrastructure remains unevenly developed, administrative procedures continue to weigh on investment and regional disparities still limit the economic integration of the internal market. Public authorities are more focused on improving the business climate than on defining a coherent industrial strategy based on clearly identified technological priorities.[8]
In the early 2000s, India was already one of the leading emerging economies in terms of population, the size of its domestic market and its growth potential. However, its place in international trade remains significantly lower than that acquired by China. Foreign direct investment, manufacturing exports, and integration into global value chains are still limited compared to the performance of East Asian economies. This situation is gradually fuelling a new reflection within public authorities, professional organisations and academic circles on the need to strengthen national manufacturing capacities in order to prevent excessive specialisation in services from permanently limiting the prospects for development, industrial job creation and technological upgrading.[9]
Thus, when China joined the World Trade Organization in December 2001, India was neither in the position of a fully constituted industrial power nor in that of an emerging economy without technological capabilities. It occupies an intermediate position, characterised by sustained growth, a particularly competitive service economy, exceptional demographic potential and a manufacturing system that is still insufficiently developed to absorb the arrival of millions of new workers on the labour market. This original configuration largely explains the questions that gradually emerged within public authorities, economists and industrial circles during the 2000s.
The real problem is no longer just about accelerating economic growth. It is becoming one of the conditions under which India can build a world-class industrial power at a time when China now concentrates a growing share of manufacturing capacity, international investment and global value chains. The issue thus goes beyond economic policy alone. It concerns the development model itself, the State’s ability to guide the structural transformations of the economy and, more broadly, the place that India intends to occupy in the new balances of globalization.[10] It is precisely in this context that the effects of the Chinese manufacturing boom on India’s industrial choices should be assessed.
B. The shock of China’s manufacturing emergence
China’s accession to the World Trade Organization ushered in a new phase of industrial globalization, the effects of which were rapidly manifesting themselves throughout Asia. In the space of a few years, the People’s Republic became the world’s leading manufacturing workshop, attracting a considerable share of foreign direct investment, developing unprecedented industrial capacities and gradually establishing itself as a central player in global value chains. This spectacular acceleration is profoundly changing the conditions of international competition that India is now facing.[11]
For the Indian authorities, as for the Japanese, South Korean and Taiwanese authorities, the rise of China is not just a commercial phenomenon. It is gradually revealing the critical importance of manufacturing capabilities in wealth creation, innovation, exports, and international influence. While the Indian economy is performing remarkably well in services, the government notes that the manufacturing sectors remain the main driver of industrialization, technology diffusion and integration into global value chains. This comparison is gradually fuelling – and as quickly as in Japan, South Korea or Taiwan – a strategic debate on the limits of development that is not sufficiently supported by a solid industrial base.[12] As a result, what is happening in Asia is considerably different from what is going to happen in Europe, where the leaders are continuing to push partnerships with China at the cost of industrial relocations that are always considered beneficial for the West.
Economic exchanges between the two countries quickly illustrated this new asymmetry. India’s imports of Chinese manufactured goods are growing rapidly, while Indian exports remain largely concentrated in primary products, intermediate goods or sectors with lower value-added. The bilateral trade deficit is steadily widening, fuelling concerns about industrial and technological dependencies that are beginning to emerge in several strategic sectors.[13]
This development does not only concern trade. Large multinational companies overwhelmingly favour China for their manufacturing investments, attracted by the quality of infrastructure, the density of subcontracting networks, logistical efficiency, the importance of economies of scale and the stability of industrial policies. India still struggles to provide a comparable environment, despite the size of its domestic market and the quality of its human resources. Difficulties in accessing land, regulatory complexity, certain rigidities in the labour market and inadequacies of infrastructure still limit the attractiveness of many regions for large-scale industrial investment.[14]
Gradually, but significantly, this comparison with China also changed the representations of industrial policy within Indian economic and administrative circles. Without calling into question the principles of an open economy or the democratic foundations of the country’s political organization, doctrinal reflections give increasing importance to innovation policies, industrial infrastructures, technological clusters, specialized economic zones and the role of the State in guiding development. It should be stressed that, for the Indian leaders, it is in no way a question of reproducing the Chinese model, but of identifying the instruments that will allow India to build its own trajectory reconciling international competitiveness, industrial development and democratic requirements.[15]
At the same time, international debates on global value chains reinforce this shift. The work of the OECD, the World Bank, UNCTAD and UNIDO highlights the decisive role of manufacturing capacities in technological upscaling and value creation. The Chinese experience thus appears to reveal the new conditions of international competition rather than a model that can be directly transposed. For Indian policymakers, the question is no longer whether to develop a real industrial policy, but how to build a strategy that is compatible with India’s specific institutional, demographic and federal characteristics.[16]
Thus, in the decade following China’s accession to the World Trade Organization, India gradually became aware that international competitiveness was no longer based solely on economic liberalization or the quality of its services. It also presupposes the creation of a manufacturing apparatus capable of innovating, producing on a large scale, disseminating technologies and sustainably supporting industrial employment. This intellectual evolution is undoubtedly one of the main factors explaining the doctrinal changes that appeared from the mid-2000s onwards and paved the way for the more ambitious reforms undertaken during the following decade.[17] In other words, India is not suddenly discovering industrial policy with Make in India. Between 2001 and 2014, she gradually developed a new reading of globalization, in which China acts as a revealer of the contemporary conditions of industrial power. This idea is logically linked to our Braudelian reading of the changes in industrial and developmental structures: the major shifts in the centre of gravity of the world economy produce less a mechanical imitation of dominant models than a recomposition of national strategies according to the structures specific to each state.
C. The first changes in Indian industrial policy (2005-2014)
While the emergence of China is gradually revealing the limits of the Indian development model, the responses provided by the public authorities remain initially cautious and largely incremental. In the decade preceding Narendra Modi’s coming to power, the objective was not yet to rebuild a fully assumed strategic state, but to improve the general conditions for industrial competitiveness, to modernize economic infrastructure and to gradually strengthen the country’s manufacturing capacities. This period thus constitutes a phase of doctrinal transition during which the main instruments that will be largely developed after 2014 are taking shape.[18]
The work of the Planning Commission gives an increasing place to the manufacturing industry in national development strategies. The eleventh and twelfth five-year plans emphasize the need to increase the contribution of the manufacturing sector to gross domestic product, improve the competitiveness of enterprises, strengthen logistics infrastructure and promote the diffusion of innovation. Without calling into question the achievements of economic liberalisation, these documents bear witness to a significant change in public priorities: industrial policy is gradually ceasing to be perceived as a simple consequence of growth and is becoming one of its main levers.[19]
This shift is also reflected in a renewed reflection on the territorial organization of industrial development. Inspired by Asian experiences but adapted to the specificities of Indian federalism, several initiatives aim to promote the concentration of productive activities within specialized industrial zones, logistics corridors and technological hubs associating companies, universities, research centers and public administrations. The launch of the Delhi-Mumbai Industrial Corridor project in 2007, developed in cooperation with Japan, marks an important milestone in this regard. More than a vast infrastructure programme, it reflects the ambition to structure new industrial ecosystems capable of attracting international investment and improving the integration of territories into global value chains. He also points to Japan’s leading role and establishes this country as a strategic partner of India in the geopolitical industrial recomposition of Asia to balance the place taken by China.[20]
At the same time, public authorities are undertaking a gradual simplification of the regulatory framework applicable to companies. The reforms concern in particular foreign direct investment, taxation, certain administrative procedures, port infrastructure, transport and the conditions for carrying out economic activities. Although these developments sometimes remain uneven depending on the federal states, they reflect a growing desire to improve the business environment in order to strengthen the country’s industrial attractiveness. The adoption of the National Manufacturing Policy in 2011 is undoubtedly the most successful illustration of this doctrinal evolution. For the first time since major liberalization reforms, a strategy document explicitly sets the goal of increasing the share of manufacturing to 25% of gross domestic product, creating an additional 100 million manufacturing jobs, and developing a network of National Investment and Manufacturing Zones (NIMZ).) intended to accommodate the largest industrial investments. Although the results were still limited before 2014, this policy marked a major conceptual break: the manufacturing industry was once again at the centre of national development priorities.[21]
Finally, this doctrinal evolution is accompanied by a more discreet but essential transformation of the very conception of public action. The debates conducted within administrations, professional organizations, international institutions and academic circles are gradually converging towards the same idea: in an economic environment profoundly changed by the rise of China, international competitiveness can no longer result from the opening of markets alone. It also requires a public capacity to define industrial priorities, coordinate investments, support innovation and support the upgrading of national companies. The state is no longer seen as a simple regulator of the economy; it is gradually tending to become an actor in its structural transformation again.[22]
Thus, between the mid-2000s and 2014, India did not yet make the spectacular break often associated with the launch of Make in India. However, it builds the doctrinal, institutional and territorial foundations of a profoundly renewed industrial policy. The instruments developed during this period will directly prepare the reforms undertaken after 2014, while the reflection on the role of the State in industrial development acquires a new coherence. The recomposition of the Indian industrial state did not therefore arise with the change of political majority; It has its origins in a more profound change in economic representations and strategic priorities, which began in the previous decade.[23]
II. The reconstruction of the Indian industrial state: from manufacturing policy to geoeconomic strategy (2014-2026)
Narendra Modi’s coming to power in 2014 marked a decisive step in the evolution of Indian industrial policy. While the transformations undertaken during the previous decade had already paved the way for a gradual rehabilitation of the role of industry in economic development, they were still largely dispersed between different sectoral, territorial and infrastructural policies. From 2014 onwards, these initiatives have acquired a new coherence. Manufacturing is moving from being seen as one of the many engines of growth to becoming one of the foundations of India’s economic strength, employment, innovation, technological sovereignty and geo-economic positioning.[24]
This recomposition does not reflect a return to the traditional forms of public intervention that characterized the first decades of independence. It stems from a renewed conception of the strategic state, more oriented towards the coordination of investments, the creation of industrial ecosystems, the development of infrastructure, the attraction of international capital, the dissemination of innovation and the gradual securing of value chains. The objective is no longer to substitute the state for the market, but to build the institutional, financial and technological conditions that will allow the private sector to become one of the main vectors of industrial transformation.[25]
This development is also part of a profoundly renewed international environment. The intensification of the Sino-American rivalry, the recomposition of global value chains, the first industrial diversification policies undertaken by large multinational companies as well as the rise of concerns about economic security offer India unprecedented opportunities for development. The Indian authorities are gradually seeking to make these international changes a lever for accelerating their own industrialization, by jointly mobilizing the instruments of industrial policy, innovation, infrastructure and economic diplomacy.[26]
The analysis of this second phase thus leads to a successive examination of the doctrinal reconstruction carried out around the Make in India programme and the redefinition of the role of the strategic State (A), the diversification of industrial policy instruments and the affirmation of new technological priorities (B), before studying the gradual integration of industrial policy into a broader strategy of economic security, of resilience of value chains and geo-economic power (C).
A. Narendra Modi, Make in India or the redefinition of the Indian industrial state
Narendra Modi’s coming to power in 2014 was a moment of doctrinal crystallisation in the evolution of Indian industrial policy. The Make in India program, launched in September 2014, is not just an economic communication campaign or a simple instrument for attracting foreign direct investment. It reflects a more profound recomposition of the conception of the role of the Indian federal state in the country’s industrial transformation. For the first time since the major reforms of 1991, manufacturing industry has been explicitly established as a national strategic priority, articulating the objectives of growth, employment, innovation and economic strength.[27]
This doctrinal reconfiguration cannot be dissociated from the political and intellectual profile of Narendra Modi, whose rise to power has helped to accelerate and systematize changes that were already perceptible within the Indian economic administration. Originally from Gujarat, a region characterized by a strong merchant tradition, a long-standing openness to international trade and a culture of industrial entrepreneurship, he has gradually established himself on the national political scene from his experience as head of government of this state between 2001 and 2014. This trajectory has contributed to forging a particular sensitivity to issues of investment, infrastructure and territorial competitiveness.[28]
His political career, rooted in a structured partisan organization and in a government practice focused on administrative efficiency and the mobilization of economic actors, is accompanied by a conception of public action where industrial growth is envisaged as a central instrument of social transformation and international projection of India. Without it being possible to reduce the genesis of Make in India to this, this orientation nevertheless contributes to giving a new political and symbolic coherence to previously dispersed industrial policy instruments, by placing them in an explicit strategy of increasing manufacturing power and geo-economic repositioning of the country.[29]
This shift does not constitute a return to the dirigiste model of the planned economy. On the contrary, it is the result of a redefinition of the industrial state in a context of advanced globalization and the fragmentation of value chains. Public action no longer aims to substitute administration for private initiative, but to structure an institutional, financial and technological environment favourable to the upgrading of national productive capacities. It should be noted here that the State is thus positioning itself as the architect of the conditions for industrial competitiveness, rather than as a direct producer of goods and services.
In this perspective, Make in India aggregates a coherent set of instruments that were previously dispersed. The policy of attracting foreign investment is strengthened and simplified, in particular by gradually relaxing sectoral rules and modernising authorisation procedures. Infrastructure policies are being intensified, particularly in the port, energy and logistics sectors. The reform of the business environment is becoming an explicit priority for government action, as evidenced by the desire to reduce administrative costs and improve international competitiveness rankings.[30]
At the same time, the programme is part of a logic of territorial organisation of industrial production. Emphasis is placed on the creation of industrial corridors, specialised economic zones and innovation hubs to foster agglomeration economies and synergies between companies, research centres and public institutions. This approach, already outlined in the previous period, is now being integrated into a more structured national strategy, aimed at gradually transforming India into a collection of interconnected industrial ecosystems rather than a juxtaposition of fragmented regional markets.[31]
One of the distinctive features of this new doctrine lies in the place given to the federated states. Far from being marginalised, they became key players in industrial policy, competing to attract investment and develop their own productive capacities. This federal dimension introduces a logic of territorial differentiation of industrial policy, which is one of the structural specificities of the Indian model compared to the experiences of East Asia. It also allows for a more refined adaptation of public policy instruments to local economic realities, but at the cost of increased heterogeneity in industrial performance.[32]
Finally, Make in India should be interpreted as an attempt to reposition India in the global hierarchy of industrial production. Amid rising concerns about diversifying value chains and reducing strategic dependencies, India is seeking to present itself as a credible alternative to Asia’s Chinese-dominated manufacturing concentration. The objective is therefore not only internal; it is also geoeconomic. The Indian federal state has clearly perceived that industrial attractiveness is becoming an instrument of power and a lever for insertion into the recomposition of productive globalization, which has not yet been understood in many European countries despite the speeches, since these are not followed by effects, especially in France unfortunately for more than twenty years. With surges in fiscal and regulatory fever that the Indian government has resolutely tackled in continuity over the two decades concerned.[33]
Thus, Make in India does not constitute a break ex nihilo, but the culmination – provisional at this stage – of a maturation process that began the previous decade. It marks the shift from an implicit, fragmented and largely sectoral industrial policy to a more integrated strategy, explicitly oriented towards the reconstruction of national manufacturing capacities. This transformation opens the way directly to diversification into new industrial policy instruments, which is the subject of the next section.
B. The diversification of Indian industrial policy instruments and the increase in coherence of public action
The implementation of India’s industrial policy from 2014 onwards has been accompanied by a rapid diversification of public intervention instruments. Far from being limited to the Make in India program, the government’s strategy is based on a multiplication of tools aimed at simultaneously acting on the attractiveness of the territory, the structuring of value chains, the technological upgrading and the securing of national productive capacities. This evolution reflects the transition from an essentially declarative industrial policy to an instrumented industrial policy, articulated around complementary mechanisms relating to investment, regulation and regional economic development.[34]
One of the central instruments of this new architecture is the Production Linked Incentives (PLI) policy, which was introduced from 2020 and extended to several strategic sectors. This measure marks a significant change in relation to previous policies, insofar as it makes public aid conditional on measurable production and export objectives. It aims to strengthen the international competitiveness of companies based in India, while encouraging the localization of segments of value chains that were previously dominated by East Asian economies.[35]
At the same time, industrial infrastructure policies are experiencing a significant intensification. The development of industrial corridors, the modernisation of port networks, the improvement of energy and logistics infrastructure and the creation of specialised economic zones are helping to structure more integrated productive ecosystems. These policies are part of an industrial agglomeration logic similar to that observed in East Asia, even if their implementation remains constrained by the institutional fragmentation of Indian federalism and by the disparities in development between federated states.[36]
A third axis concerns the gradual reform of the foreign investment framework. The relaxation of rules on foreign direct investment in several manufacturing sectors, the simplification of administrative procedures and the digitalization of certain authorization processes are helping to improve the business environment. These developments aim to strengthen India’s attractiveness in a context of global reconfiguration of value chains, marked by the diversification strategies of multinational companies out of China.[37]
At the same time, the central government is strengthening its strategic coordination capacities through institutions such as the National Institution for Transforming India, which is playing an increasing role in the formulation of cross-cutting industrial policies. This evolution reflects a more profound change: industrial policy is no longer exclusively sectoral or fragmented, but tends to become intersectoral, integrating the dimensions of innovation, territorial competitiveness, digital transition and technological sovereignty.[38]
Finally, increasing attention is being paid to sectors considered strategic in view of the transformations of contemporary globalisation, in particular digital technologies, semiconductors, defence and industries linked to the energy transition. The emergence of specific programmes in these areas reflects a rise in the geo-economic dimension of Indian industrial policy, which no longer aims only at internal growth, but also at securing technological dependencies and the ability to integrate into critical value chains.[39]
Thus, contemporary Indian industrial policy is not only characterized by a quantitative reinforcement of public interventions, but by a qualitative recomposition of its instruments. These tend to gradually form a coherent system, articulating production incentives, infrastructure policies, attractiveness of investment, institutional coordination and technological priorities. This development partially brings India closer to the models of East Asia, while retaining structural specificities linked to its federal organization, the diversity of its economic fabric and the dominant place of the service sector in its growth trajectory.
This increase in coherence directly prepares the next question: that of the inclusion of Indian industrial policy in a strategy of geoeconomic power and economic security, where the logics of dependence, resilience and technological rivalry become structuring. India is similar to the models carried by Japan, South Korea and Taiwan. [40]
C. The inclusion of Indian industrial policy in the global geoeconomy and economic security
From the mid-2010s and even more so in the early 2020s, Indian industrial policy gradually became part of a broader framework that went beyond the sole logic of internal economic development. It is becoming an instrument of positioning in the reconfigured globalization, marked by the intensification of technological rivalries, the fragmentation of value chains and the rise of concerns about economic security. This evolution reflects a qualitative transformation: industry is no longer just a growth sector, but a vector of sovereignty and power in an increasingly unstable international environment.[41]
This shift is first and foremost linked to the growing awareness of the vulnerabilities induced by external dependencies in strategic sectors. The disruptions in supply chains observed during the Covid-19 pandemic, followed by geoeconomic tensions between major powers, have highlighted the need to secure access to critical inputs, advanced technologies and critical industrial components. India is thus part of a broader movement to recompose national industrial strategies, in which the logic of economic efficiency is gradually giving way to a logic of resilience and security.[42]
In this context, India’s industrial policy tends to converge with the strategies developed by advanced economies, notably the United States, Japan and the European Union, around the security of critical value chains. Initiatives to expand domestic semiconductor production, build capacity in defence industries, promote sovereign digital technologies and reduce dependencies on certain dominant suppliers are part of this dynamic. India is thus seeking to position itself as an alternative player in the recomposition of the world map of industrial production.[43]
This orientation is also reflected in India’s economic diplomacy, which is increasingly placing emphasis on technology partnerships, strategic industrial agreements and innovation cooperation. Strengthened relations with the United States within the framework of the Indo-Pacific Economic Framework, cooperation with Japan in industrial infrastructure and technological dialogues with the European Union illustrate this growing importance of the external dimension of industrial policy. This is no longer the sole responsibility of the Ministry of Industry, but now mobilizes the entire diplomatic and strategic apparatus of the State.[44]
At the same time, the Indian authorities are seeking to transform their position in global value chains by taking advantage of international companies’ diversification strategies away from China. This so-called China +1 dynamic is a structural opportunity for India, which is trying to attract some of its manufacturing capacity to its territory. However, this strategy remains conditioned by significant internal constraints, particularly in terms of infrastructure, workforce skills and regulatory stability, which still limit its full implementation.[45]
Finally, this evolution leads to a more profound transformation of Indian economic doctrine: industrial policy is no longer just a tool for catching up or growth, but becomes a constituent element of geoeconomic power. The Indian industrial state now defines itself as an actor seeking to simultaneously integrate global value chains, reduce its critical dependencies and increase its capacity to influence international technological and industrial standards. This triple logic — integration, resilience, projection — is now at the heart of India’s contemporary industrial strategy.[46]
III. The Structural Limits and Tensions of the Indian Industrial State Model (2014-2026)
The rise in power of India’s industrial policy since 2014 has not been accompanied by a complete homogenization of its results or the removal of the structural constraints that weigh on the country’s development trajectory. While the Indian industrial state is tending to recompose itself around a more coherent doctrine and more diversified instruments, this dynamic remains permeated by deep tensions, linked to the country’s economic structure, its institutional organization and its specific integration into contemporary globalization.[47]
These tensions do not call into question the reality of the transformation process that has begun, but modify its scope and pace. Firstly, they are due to the persistence of a marked productive duality between a manufacturing sector that is still relatively limited as a share of GDP and a strongly dominant service sector, which structurally distinguishes India from the historical trajectories of Japan, South Korea and Taiwan. This configuration mechanically limits industrial knock-on effects and complicates the move upmarket of the entire economy.[48]
They are also due to the constraints of Indian economic federalism, which introduces a strong territorial heterogeneity in the implementation of industrial policies. The ability of federated states to attract investment, develop infrastructure and implement structural reforms varies widely, producing significant differences in performance. This institutional fragmentation is both a resource for experimentation and a limit to the overall coherence of the national industrial strategy.[49]
In addition, despite efforts to improve the business environment and attract foreign investment, persistent constraints remain in terms of logistics infrastructure, workforce skills and regulatory predictability. These factors continue to affect India’s relative competitiveness in the most capital- and technology-intensive segments, limiting its positioning in some strategic value chains.[50]
Finally, the growing integration of industrial policy into a logic of economic security and geo-economic rivalry introduces new arbitration constraints. The simultaneous search for international attractiveness, the reduction of critical dependencies and the securing of value chains leads the Indian state to multiply potentially contradictory objectives. This tension between openness and security, between integration and sovereignty, is now one of the structuring features of the country’s contemporary industrial policy.
All of these elements thus lead to a successive analysis of the persistent structural imbalances of the Indian development model (A), the institutional and federal limits of the implementation of industrial policy (B), and then the geoeconomic and strategic tensions that affect the overall coherence of the model (C).
A. The structural imbalances of the Indian productive model and their effects on industrial policy
The industrial transformation trajectory undertaken by India since 2014 is coming up against deep structural constraints linked to the very configuration of its productive apparatus. Despite the efforts undertaken to strengthen the national manufacturing base, the Indian economy remains characterized by a persistent duality between a highly dynamic service sector and an industrial sector whose contribution relative to value added and employment remains limited in relation to the stated ambitions. This pattern distinguishes India from the historical industrialization trajectories observed in East Asia, where the rise of manufacturing has been the main driver of economic transformation.[51]
This sectoral duality has direct effects on the ability of industrial policy to generate driving dynamics. In the Japanese, Korean or Taiwanese models, the expansion of the manufacturing sector has made it possible to structure integrated value chains, favouring the diffusion of technological progress to the entire economy. In India, the predominance of knowledge-intensive services, often disconnected from intermediate industrial segments, limits these effects of horizontal diffusion and complicates the constitution of a dense and hierarchical productive fabric.[52]Several analyses converge on this point: economists such as Arvind Subramanian and Raghuram Rajan have pointed out that Indian growth is excessively based on sectors that are relatively less intensive in industrial employment, which weakens the prospects for long-term structural transformation.[53] In a similar perspective, Dani Rodrik insists on the « prematurely deindustrialised » nature of certain emerging economies, of which India is one of the paradigmatic cases.
In addition to this first constraint, there is the fragmentation of the Indian industrial fabric, marked by the coexistence of a relatively competitive formal sector and a still very large informal sector. This internal duality reduces the state’s ability to implement homogeneous industrial policies and effectively disseminate productivity gains. It also leads to strong asymmetries in terms of access to finance, technology and infrastructure, which limits the overall upscaling of the production system.[54] Kaushik Basu’s work has highlighted the structuring role of informality as a factor of institutional rigidity, preventing the consolidation of a real intermediate industrial fabric.
In addition, the sectoral structure of Indian industry remains dominated by medium- and low-technology segments, despite recent efforts to diversify into advanced industries. The strategic sectors identified by contemporary industrial policy — electronics, semiconductors, defense, digital technologies — still represent only a limited share of total industrial production, which mechanically reduces the aggregate impact of upmarket policies. Several reports already cited by the World Bank and the OECD underline that this difficulty in bringing about a « middle manufacturing layer » is one of the main bottlenecks of the Indian model.
Finally, these structural imbalances are reinforced by a specific demographic and social constraint. The size of the labour force, combined with the need to create a very large volume of industrial jobs, puts additional pressure on industrial policy, which must simultaneously meet the objectives of international competitiveness and economic inclusion. This tension between efficiency and job absorption is one of the major specificities of the Indian case, and profoundly distinguishes its trajectory from those of the East Asian economies, where the demographic transition had already modified the constraints of industrial development during their ramp-up phase. Lant Pritchett spoke of a risk of « jobless growth » in India, in which macroeconomic growth does not automatically translate into a structural transformation of employment.[55]
Thus, far from constituting a simple delay in development, the Indian productive structure appears to be a specific configuration, in which industrial policy instruments must deal with strong internal constraints, which limit the speed of transformation and the depth of sectoral restructuring. Several authors, particularly in the recent Anglo-Saxon literature on « late industrializers« , insist on the fact that India is not simply in a catch-up phase, but in a hybrid trajectory combining incomplete industrialization and advanced tertiarization, which makes its model particularly difficult to stabilize over time.
B. The constraints of economic federalism and the institutional fragmentation of industrial policy
The implementation of India’s industrial policy faces a major structural constraint related to the federal organization of the state and the distribution of economic responsibilities between the central level and the federated states. While the federal government has key levers in industrial policy—indirect taxation, major investment programs, trade policy, and production incentives—a significant part of the determinants of industrial competitiveness is the responsibility of the federal states, particularly in terms of land, labor law, local infrastructure, and the administrative environment for businesses.[56] This institutional configuration produces a profoundly multi-level system of economic governance, in which policy coherence depends on the capacity for coordination between the centre and the peripheries.
This distribution of competences produces a strong territorial heterogeneity in the implementation of industrial policies. Some states, such as Gujarat, Maharashtra or Tamil Nadu, have developed active investment attraction strategies, combining infrastructure, regulatory stability and pro-industry policies. Other states remain marked by stronger institutional constraints, producing an asymmetrical and sustainable industrial geography.[57] This « India of states » is now a decisive factor in industrial performance, as shown by the recent empirical work of Isher Judge Ahluwalia, who insists on the decisive role of subnational policies in the country’s overall competitiveness.
In this context, national industrial policy takes the form of incentive-based rather than hierarchical coordination, based on benchmarking, ranking and institutional competition between states.[58] This evolution has been interpreted by Ashoka Mody as the expression of a structurally unequal competitive federalism, in which the capacity for action depends heavily on local administrative and fiscal resources.
However, this dynamic produces ambivalent effects. It encourages institutional experimentation and the emergence of efficient regional models, but it also accentuates disparities in development trajectories. Arvind Panagariya stresses that inter-state convergence is a major lever for accelerating national growth, while Jean Drèze highlights the risks of increased territorial fragmentation, which is likely to reinforce structural inequalities.[59]
In addition, the introduction of the Goods and Services Tax (GST) is a major attempt to reduce internal fiscal fragmentation. It allowed for partial integration of the Indian domestic market by removing a set of inter-state barriers that held back the movement of goods and services.[60]However, this reform, as structuring as it is, is not enough to neutralize the effects of institutional fragmentation linked to the residual powers of the federated states in industrial and regulatory matters.
Finally, national industrial programmes such as Make in India or production incentives must be adapted, negotiated and sometimes reinterpreted at the local level, producing a true multi-level industrial governance. This reinforces the composite nature of India’s industrial policy, which combines central leadership and differentiated implementation.
From this perspective, the critical literature points out that this fragmentation can produce unexpected structural effects on markets. CUTS International thus insists on the fact that certain industrial policies combining targeted incentives and differentiated local regulations can reinforce industrial concentration and limit effective competition, especially for SMEs.[61] This reading introduces an essential dimension: Indian economic federalism is not only a mechanism for territorial differentiation, but also a potential factor in market restructuring.
On a more analytical level, this institutional fragmentation interacts with the imbalances in the Indian productive fabric. Raghuram Rajan points out that this multi-level architecture is inseparable from the Indian democratic structure, but that it limits the ability to implement a homogeneous and rapid industrial strategy.[62]
At the same time, World Bank analyses highlight that this institutional fragmentation is accompanied by a persistent segmentation of the labour market and productive performance, reinforcing the gaps between dynamic and backward states.[63] Finally, the World Bank’s employment dataconfirm that these territorial disparities translate directly into gaps in productivity and access to formal jobs.[64]
Thus, Indian federalism appears as an ambivalent structure, both a driver of institutional experimentation and a factor of strategic fragmentation. This tension is reinforced by the structural constraints of the labour market and industrial employment, which limit the capacity for rapid convergence between the different components of the national territory.[65]
Box 1
The gradual rise of competition policy in India (late 1990s – 2025)
Competition policy in India is part of a progressive institutional trajectory that began in the late 1990s, following on from the economic liberalization reforms initiated in 1991. The transition from a regime of administrative control of market structures to a regime based on competition has led to the gradual replacement of the Monopolies and Restrictive Trade Practices Act (MRTP Act, 1969) with a modernized legal framework, enshrined in the Competition Act of 2002.[66]
In this initial phase, the Indian competition doctrine remains largely experimental. The analyses developed by CUTS International underline that this period is characterised by a structural tension between the opening up of markets and the persistence of managed behaviour, particularly in the network sectors (telecommunications, energy, transport). Since the early 2000s, CUTS has insisted on the need to go beyond a formal conception of competition to integrate the institutional and sectoral dimensions of its effectiveness.[67]
With the effective entry into force of the Competition Act and the creation of the Competition Commission of India (CCI) in the mid-2000s, competition policy entered a phase of institutional construction. This period was marked by the gradual definition of legal standards relating to cartels, abuse of dominant positions and merger control. CUTS International is accompanying this phase with a series of empirical reports on competitive distortions in key sectors of the Indian economy, in particular infrastructure, pharmaceuticals and telecommunications.[68]
From the 2010s onwards, Indian competition policy has been expanding towards a phase of sectoral intensification and analytical sophistication. The CCIintervenes more systematically in oligopolistic sectors and in markets that are being digitised. CUTS International highlights the rise of anti-competitive practices in platform markets and digital services, as well as the difficulty of authorities in understanding new data-driven business models.[69]
The recent period (2020–2025) is characterized by an extension of competitive regulatory instruments to digital markets and by a gradual convergence with international standards. CUTS International points out that this phase corresponds to a transition to a data economy, in which competition issues are no longer limited to traditional market structures, but include network effects, informational asymmetries and ecosystem strategies.[70]
In this context, Indian competition policy appears to be a hybrid instrument: it combines a function of market liberalization, a function of regulation of oligopolistic structures and an emerging function of governance of digital markets. CUTS International insists that the effectiveness of the mechanism depends less on the formal sophistication of the law than on the institutional capacity for implementation and intersectoral coordination.
C. Geoeconomic tensions and strategic trade-offs of the Indian industrial state
India’s integration into contemporary globalization is accompanied by an intensification of geo-economic tensions that directly affect the coherence of its industrial policy. Far from being deployed in a homogeneous global space, India’s industrial strategy is now structured by a fragmented international environment, marked by technological rivalry between great powers, the reconfiguration of global value chains and the rise of economic security logics.[71] In this context, the Indian industrial state must simultaneously pursue potentially contradictory objectives: integration into global markets, the rise of strategic autonomy and the attraction of foreign investment.
This tension is particularly visible in the triangular relations between India, China and the United States. China remains a central player in Asian supply chains, especially in midstream industries and capital goods, making any process of reducing dependencies structurally costly. At the same time, the United States appears to be an essential strategic partner in the technological and security fields, particularly in the context of the Indo-Pacific recompositions.In this regard, [72] Raghuram Rajan points out that India evolves in a space of constrained interdependence, where the search for strategic autonomy cannot be thought of outside the constraints of a global network.
This configuration led to a gradual transformation of industrial policy, which became an instrument of economic diplomacy. Initiatives aimed at strengthening domestic production in strategic sectors – semiconductors, electronics, defence, digital technologies – are part of a logic of reducing critical dependencies but also of repositioning themselves in global value chains.[73] However, Arvind Panagariya points out that these upmarket strategies only produce lasting effects if they are based on a prior improvement in domestic productivity and logistics competitiveness.
In addition, India is trying to take advantage of the ongoing recompositions in the strategies of multinational firms, particularly through the so-called China +1 dynamic. This industrial diversification strategy is an important opportunity but still not fully realized.[74] CUTS International insists that this recomposition of global value chains can produce asymmetric effects: while it attracts new investment, it can also increase dependence on low value-added segments if industrial policies are not sufficiently geared towards technological upscaling and effective competition.[75]
In this context, Indian industrial policy also becomes an instrument for integration into regional architectures of economic and technological cooperation. Participation in frameworks such as the Indo-Pacific Economic Framework or bilateral dialogues with Japan, the United States or the European Union reflects a strategy of diversifying dependencies and maximising strategic flexibility.[76] However, this multi-alignment strategy entails increasing coordination costs and imposes complex trade-offs between trade openness and industrial security.
Finally, several analyses converge on a critical point: the rise of the logic of economic security risks producing a selective reconfiguration of globalization rather than a global decoupling. CUTS thus underlines that reshoring and resilience policies, if they are not accompanied by a coherent industrial policy, can lead to increased fragmentation of markets without significant improvement in local productive capacities.[77] Rajan adds that this global fragmentation places emerging economies in a situation of permanent strategic uncertainty, where integration gains and sovereignty costs must be constantly reassessed.
Thus, the Indian industrial state evolves in a space constrained by external structural tensions: it must simultaneously integrate, protect and reposition itself in an increasingly fragmented world economy. This permanent tension between openness and security, between integration and autonomy, is now at the heart of the dynamics of contemporary Indian industrial policy.
Box 2
The Indian Strategic State and the Regulation of the Digital Economy:
Legal frameworks, mechanisms and litigation (2000–2026)
The legal framework for the digital economy in India has developed gradually, starting with the Information Technology Act of 2000, which constitutes the initial basis for the regulation of digital services, intermediaries and communication infrastructures.[78] This framework, initially focused on cybersecurity and intermediary liability, has been profoundly transformed by a series of successive reforms aimed at adapting the legal architecture to the rapid digitization of the Indian economy.
The first phase (2000–2015) was characterised by essentially sectoral and reactive regulation, based on the IT Rules and their successive amendments. In this configuration, regulation is largely based on the responsibility of the platforms, particularly in terms of content removal and cooperation with public authorities. The Internet Freedom Foundation‘s analysis highlights that this period is characterized by a structural asymmetry between the rise of digital platforms and the institutional capacity to regulate, resulting in fragmented digital governance.[79]
A second phase (2015–2023) corresponds to the emergence of a more integrated architecture of the digital economy, articulated around three pillars: digital identification (Aadhaar), payment infrastructures (UPIs) and public digital service platforms. This period is marked by a rise in the notion of « Digital Public Infrastructure« , analysed in particular by the World Bank and several public policy works as an alternative model of digital governance based on interoperable public platforms.[80]
On the normative level, this phase is also marked by the adoption of the Digital Personal Data Protection Act (2023), supplemented by implementing rules adopted in 2025, which establish a general framework for the protection of personal data. [81]This text introduces a logic of structured consent, data minimization obligations and accountability of private actors, partially bringing the Indian framework closer to international standards such as than the European GDPR.
A third phase (2023–2026) is characterised by the emergence of regulation more explicitly oriented towards digital markets and platforms. The report of the Committee on Digital Competition Law (2024) recommends the adoption of an ex ante regime applicable to large digital platforms, in order to complement the Competition Act of 2002, which is deemed insufficient to deal with the phenomena of « tipping markets » and structural lock-in.[82] This project marks a significant shift towards a logic of anticipatory regulation of digital markets.
In the area of litigation, several decisions of the Competition Commission of India (CCI) have focused on the practices of the major digital platforms, in particular with regard to abuse of dominant position, self-preference clauses and restrictions on access to application ecosystems.[83] The proceedings brought against certain application distribution or e-commerce platforms illustrate the gradual rise of competition regulation applied to digital markets.
At the same time, CUTS International’s analyses highlight that the regulation of the digital economy in India remains characterized by a structural tension between innovation, competition and administrative control. CUTS highlights the fact that digital regulatory mechanisms have ambivalent effects on SME entry, market contestability and the structuring of technology ecosystems, particularly in the platform and artificial intelligence sectors.[84]
Finally, the most recent period is marked by a gradual convergence between industrial policies, competition policies and digital sovereignty policies. This articulation is manifested in particular in the debates relating to data governance, the regulation of artificial intelligence and the security of critical digital infrastructures. Several recent analyses point out that India is thus developing a hybrid model of digital regulation, combining public infrastructure, competitive regulation and targeted state intervention.
From this perspective, the Indian digital economy appears to be a space of institutional recomposition where several logics are superimposed: liberalization of markets, construction of digital public infrastructures, strengthening of data protection and the rise of competitive regulation of platforms.
IV. The lessons of the recomposition of the Indian industrial state
The analysis of the Indian trajectory allows us to go beyond the descriptive level of the case study to access a more general reading of the contemporary transformations of the industrial state. India is a particularly revealing case of the recompositions taking place in emerging and advanced economies, as it combines mass democracy, institutionalized federalism, rapid demographic transition, the rise of services, and partial but significant industrialization in some strategic sectors.[85] This original combination distinguishes it both from the models of directed industrialization in East Asia and from the more liberal configurations of Western economies.
From this perspective, the interest of the Indian case lies not only in its national specificities, but in its ability to highlight structural tensions that are now common to all contemporary industrial states, whether it is the articulation between the market and public intervention, the prioritization of technological priorities, the management of critical dependencies or the integration into increasingly globalized value chains fragmented.
Therefore, this last part aims to draw out the general lessons of this Indian trajectory in order to feed a broader comparative reflection including the experiences of Japan, South Korea, Taiwan, China and the United States, as well as their implications for the construction of contemporary industrial policies, in particular in the European context. It will be structured in three stages, first analysing the structural specificities of the Indian model (A), then putting it into comparative perspective with the main models of East Asia and the major industrial powers (B), before finally questioning the lessons that these dynamics can offer to European industrial policy (C).
A. The structural specificities of the Indian model
The Indian model of industrial policy is distinguished first of all by the profoundly federal nature of its institutional architecture, which constitutes one of its most structuring and differentiating features in a comparative perspective. Unlike the East Asian states, which are characterized by a high degree of centralization of economic decision-making and a high capacity for vertical coordination between administration, industry and finance, India is based on a complex distribution of competences between the central government and the federated states. This configuration produces a fragmented but also experimentally rich industrial governance, in which public policies are built in a permanent game of adjustments between levels of power.[86]
This federal structure is articulated with a demographic dynamic of exceptional magnitude, which is both an asset and a constraint. On the one hand, the size and relative youth of the population offer considerable potential in terms of domestic market and workforce, strengthening the country’s structural attractiveness in global value chains. On the other hand, this dynamic imposes continuous pressure on the capacity to create industrial jobs and to increase qualifications, limiting the rapid transformation of the demographic dividend into a sustainable productive advantage.[87]
In addition to these two dimensions, the profoundly democratic and pluralistic nature of the Indian political system is a major differentiator from the accelerated industrialization trajectories observed in East Asia. Indian democracy, through its competitive intensity and the fragmentation of political preferences that it implies, mechanically limits the capacity for long-term central planning, while strengthening the legitimacy of economic and industrial arbitrations. This tension between the constraint of governability and democratic legitimation is one of the essential markers of the contemporary Indian model.
The fourth structuring feature is the nature of the Indian domestic market, which is vast but still incompletely integrated. Despite recent reforms, including the introduction of the Goods and Services Tax (GST), which has helped reduce some inter-state tax barriers, the Indian economy remains characterized by high levels of interstate regulatory, infrastructural and productive heterogeneity.[88] This internal fragmentation produces a highly differentiated industrial geography, in which some regional hubs are fully integrated into global value chains while others remain in relative retreat.
Finally, India’s productive structure is characterized by a singular combination between a relatively constrained manufacturing base and a particularly dynamic service sector, particularly in information technology, digital services and high value-added outsourced activities. This dual configuration clearly distinguishes India from the traditional trajectories of industrialization by substitution or by manufacturing export observed in East Asia. It reflects a form of partial ramp-up, where international competitiveness is based as much on advanced services as on the manufacturing industry itself.[89]
All of these characteristics thus define a hybrid model of an industrial state, in which the logic of strategic centralization observed in Japan, South Korea or Taiwan gives way to a logic of multi-level coordination, combining federal impetus, regional autonomy and differentiated insertion into global value chains. This model is neither an incomplete form of classical Asian trajectories, nor a simply liberal variant of industrial development, but a specific configuration, the coherence of which is based precisely on the management of internal asymmetries.
B. Comparative perspectives: Japan, South Korea, Taiwan and India
A comparative analysis of the industrial trajectories of Japan, South Korea, Taiwan and India highlights the existence of several distinct models of industrial states in Asia, which differ less in their general objectives — technological upgrading, securing value chains and integration into global markets — than in their institutional architectures. their industrial policy instruments and their modalities of coordination between the State, industry and the financial system.[90]
The experiences of Japan, South Korea and Taiwan have historically been characterized by a strong centralization of industrial decision-making and a high capacity for strategic coordination between economic administrations, companies and the financial system. This configuration has enabled the implementation of coherent industrial policies, based on sector selection, credit orientation and the organization of export value chains. In Japan, this dynamic has been structured around the action of MITI, while in South Korea, public intervention has accompanied the rise of integrated industrial conglomerates. In Taiwan, the state has played a structuring role in the creation of specialized technological ecosystems, particularly in semiconductors.[91]
Conversely, India is distinguished by a more diffuse and multi-level coordination logic, in which industrial policy results from the interaction between the central government, the federated states and private actors. Rajan points out that this configuration produces an institutionally complex economy, in which performance depends largely on the quality of local institutions and the administrative capacity of the federated states, rather than on homogeneous central planning.[92]
In terms of instruments, East Asian models have historically mobilized direct tools for sector selection, credit control, and indicative industrial planning, while India relies more on incentives, fiscal, and regulatory mechanisms, notably through recent Production Linked Incentives. However, Panagariya points out that these instruments only produce lasting structural effects if they are accompanied by a simultaneous improvement in overall productivity, logistics infrastructure and the quality of administrative execution.[93]
In terms of innovation, South Korea and Taiwan exemplify models of technological upscaling that are strongly structured around industrial champions and integrated value chains, while Japan is based on a link between large industrial groups and public technology policy. India, on the other hand, has a hybrid configuration, combining a highly competitive digital services sector and a manufacturing base that is still consolidating, which several World Bank analyses describe as a dual productive structure.
In the field of critical technologies, China and the United States are now structuring a global systemic rivalry space, while Japan, South Korea, and Taiwan occupy intermediate positions of integrated advanced technological power. India is trying to fit into this restructured architecture, without yet having an equivalent industrial base in the most capital- and technology-intensive segments.
However, this reading is nuanced by several critical analyses. CUTS International points out that contemporary industrial policies in Asia cannot be reduced to vertical planning models, but are based on hybrid configurations combining competition, regulation and incentives, with ambivalent effects on market structure and the integration of SMEs into value chains.[94] From this perspective, the distinction between « dirigiste » and « fragmented » industrial states must be put into perspective in favour of a more detailed typology of industrial coordination modes.[95]
Similarly, Jean Drèze reminds us that industrial growth trajectories must be evaluated in terms of their distributional effects, since the most efficient models in terms of technological upgrading can coexist with high levels of internal inequalities.[96] Conversely, Ashoka Mody insists on the limits of contemporary Indian trajectories, characterized by uneven macroeconomic performance and persistent institutional fragmentation, which hinder the structural transformation of the economy.
Thus, the comparison highlights not a single model of an Asian industrial state, but a plurality of trajectories structured around different trade-offs between centralization and fragmentation, planning and incentives, manufacturing and services, technological innovation and social inclusion.
C. Lessons for European industrial policy
The analysis of the Indian and East Asian trajectories makes it possible to draw a set of structuring lessons for European industrial policy, no longer understood only as a policy of internal competitiveness, but as an instrument of strategic positioning in a world economy characterized by geo-economic fragmentation, the rise of critical technologies and the reconfiguration of value chains.[97] This reading is in line with the comparative analyses devoted to the trajectories of Japan, South Korea and Taiwan, which have highlighted the decisive role of the prioritisation of industrial priorities and the coherence of public instruments.
A first lesson is the need to clarify strategic industrial priorities. The work on Japan and South Korea shows that upmarket trajectories are based on an explicit and sustainable selection of critical sectors, combined with a strong concentration of public instruments on hierarchical industrial objectives.[98] In Taiwan, the analysis of industrial and technological policies also confirms the importance of coherence between research policy, the structuring of industrial clusters and integration into global value chains. In this perspective, the more diffuse configurations, of which India is a contemporary illustration, highlight the limits of a dispersion of public instruments in the absence of sufficiently stabilized sectoral prioritization.
A second lesson concerns the link between competition policy and industrial policy. Analyses of the East Asian economies show that competition policy has never been conceived in isolation from national industrial strategies, but integrated into a logic of coordinated development.[99]Conversely, the Indian experience highlights the tensions resulting from a partially non-hierarchical coexistence between competitive regulation and incentive industrial policies. For the European Union, this issue refers to a structural tension between the competitive architecture of the internal market and the emerging industrial policy objectives.
A third lesson lies in the rise of the logic of economic security and the resilience of value chains, already highlighted in the analyses of Taiwan and South Korea, where securing critical technologies is now an explicit public policy objective.[100] In this context, India illustrates a strategy of gradual diversification of dependencies, particularly in the context of the so-called « China +1 » restructurings. In the European case, this development requires a rereading of industrial policy instruments based on the concept of « open strategic autonomy », which is now being mobilised in the work of the European Commission.
A fourth lesson concerns the structuring of industrial policies around critical technologies, a central dimension of the analyses relating to Taiwan and South Korea, where semiconductors, advanced digital technologies and strategic industrial infrastructures are pillars of economic power.[101]India is still in a phase of partial capacity consolidation in these segments, highlighting the persistent gaps between the different Asian models of industrial processing.
A fifth lesson relates to the need for a structured external industrial cooperation policy, already observed in comparative analyses of Asian trajectories, in particular through the regional dynamics of value chains and technological complementarity.[102] In this context, India appears to be a major strategic partner, likely to be part of broader industrial cooperation architectures.
Finally, these elements converge towards a general conclusion: contemporary industrial states cannot be understood through a binary opposition between interventionism and liberalism, but must be analyzed as hybrid configurations in which industrial policy constitutes a central instrument of economic power and geoeconomic positioning. From this perspective, the European Union appears less as a fully constituted industrial state than as a system in recomposition, faced with the need to prioritise its priorities, to structure its instruments and to stabilise its doctrine of strategic autonomy.
Conclusion
Twenty-five years after China’s accession to the World Trade Organization, India’s industrial development appears less as a short-term reaction to the rise of its neighbor than as the expression of a much more profound transformation of the world political economy. India has neither reproduced the Chinese model, nor extended the trajectories taken by Japan, South Korea or Taiwan. It has gradually developed an original path, based on the combination of a vast internal market, exceptional demography, pluralist democracy, an open economy and an assumed return of the strategic state to the direction of industrial development.
The analysis carried out in this study thus confirms that China’s entry into the world economy has not led the Indian authorities to give up on industrialisation. On the contrary, it has fostered a progressive awareness of the conditions necessary for the assertion of an autonomous economic power. The Make in India, Digital India, Startup India policies, targeted support for manufacturing and critical technologies, as well as new economic security strategies reflect the desire to rebuild a productive apparatus capable of simultaneously supporting growth, employment, innovation and technological sovereignty.
The originality of this development, however, lies in the very nature of the challenges that India continues to face. No other industrial state today must create, in such a short time, the tens of millions of skilled jobs required by the continuous arrival of new generations on the labour market. India’s industrial policy is therefore not only aimed at international competitiveness; It also constitutes a policy of human development, territorial cohesion and social stability. In this respect, demography is not only a constraint: it is becoming one of the main drivers of future industrial power.
This trajectory also offers several lessons that may be of interest to European economies. The Indian experience shows that trade openness does not preclude the development of national industrial priorities, that competitiveness requires sustained investment in research, infrastructure, skills and critical technologies, and that economic security is now becoming a permanent component of policy. At a time when the European Union is questioning the renewal of its industrial policy and the conditions for its strategic autonomy, the Indian case is a reminder that no major economy can sustainably preserve its prosperity without identifying the sectors in which it intends to exercise technological and industrial leadership.
Beyond the Indian case alone, this study finally confirms that the twenty-first century marks less the disappearance of the industrial state than its profound recomposition. Contemporary industrial policies no longer proceed from a uniform logic; they take different forms according to the history, institutions, demographics, resources and geopolitical environment specific to each state. Japan, South Korea, Taiwan and India illustrate four distinct trajectories of adaptation to the same transformation of the global economy: the emergence of China as the leading manufacturing power and the reorganization of international value chains.
As Fernand Braudel has masterfully shown, the great world-economies do not disappear; they are recomposed according to the successive shifts in the centers of gravity of economic activity and power relations.[103] India’s industrial boom is an integral part of this long-term historical movement. More than just an economic catch-up, it may herald the emergence of a new configuration of the industrial state in the twenty-first century, where power will be measured less by the accumulation of productive capacities than by the ability of states to articulate innovation, technological sovereignty, human development, the resilience of value chains and geoeconomic influence.
Appendix n°1
Doctrinal Developments in Indian Industrial Policy (1991–2026)
| Period | Dominant paradigm | Objectives | Main instruments | General Orientation |
| 1991–2000 | Economic liberalization | Denationalization, commercial opening | Deregulation reforms, FDI opening | Transition to the Administered Economy → Market |
| 2000–2010 | Institutionalization of the market | Building a competitive contracting framework | Competition Act 2002, sectoral reforms | Emerging regulatory state |
| 2010–2016 | Enabling State | Export industrialization | Sectoral programmes, industrial zones | State-market hybridization |
| 2016–2020 | Incentive Strategic State | Domestic industrialization | Make in India, Start-up India | Active industrial policy |
| 2020–2026 | State Technological Strategist | Industrial and digital sovereignty | PLI schemes, Digital India, semiconductors | Power saving |
Appendix n°2
Main Industrial Policy Financial Programmes (India)
| Program | Sectors | Period | Amount Committed (INR) | Equivalent € (approx.) | Objective |
| Make in India | Manufacturing | 2014– | ~INR 1000 billion | ~€11–12 billion | Industrialization |
| Production Linked Incentives (PLIs) | Electronics, pharma, auto | 2020– | ~1.97 lakh crore INR | ~€22 billion | Local production |
| Semiconductor Mission | Semiconductors | 2021– | ~INR 760 billion | ~€8.5 billion | Technological sovereignty |
| Digital India | Digital | 2015– | ~INR 500 billion | ~€5.5 billion | Digital Infrastructure |
| Startup India | Innovation | 2016– | ~INR 100 billion | ~€1.1 billion | Innovation ecosystem |
Appendix n°3
Institutions of Indian Industrial Policy
| Institution | Level | Role | Scope of intervention |
| IPRD | Central | Industrial management | Industrial policy |
| NITI Aayog | Central | Strategic Planning | Economic strategy |
| Ministry of Commerce & Industry | Central | Implementation | Trade/Industry |
| Ministry of Electronics & IT | Central | Digital | Digital economy |
| RBI | Macro-financial | Monetary policy | Credit and investment |
| State governments | Federal | Territorial implementation | Industrial areas |
Appendix n°4
Chronology of major industrial reforms (1991–2026)
| Year | Reform | Nature | Impact |
| 1991 | Economic liberalization | Structural | Opening up the economy |
| 2002 | Competition Act | Legal | Creation of CCI |
| 2010 | Industrial Policy reforms | Sectoral | Industrial modernization |
| 2016 | GST reform | Tax | Unified internal market |
| 2014–2020 | Make in India | Industrial | Targeted industrialization |
| 2020 | PLI schemes | Incentive | Industrial relocation |
| 2023 | DPDP Act | Digital | Data regulation |
Appendix n°5
Comparison of industrial policy instruments
| Instrument | Japan | South Korea | Taiwan | India |
| Planning | Indicative (METI) | Strong coordination | Strong technocracy | Partial (NITI Aayog) |
| Funding | Bank + Keiretsu | Chaebols + public credit | SME + Technological State | Incentive Programs |
| Technology policy | Very advanced | Very advanced | Ultra-specialized (semiconductors) | In structuring |
| Strategic State | Stable | Centralized | Technological | Hybrid |
| Export strategy | Strong | Very strong | Dominant | Uphill |
Appendix n°6
Strategic Priority Areas
| Status | Historical areas | Technology Sectors | Emerging sectors |
| Japan | Automotive, steel | Robotics, semiconductors | AI, hydrogen |
| South Korea | Industrial Chaebols | Semiconductors, electronics | AI, batteries |
| Taiwan | Electronics | Semiconductors (TSMC) | Photonics, AI |
| India | Textiles, pharma | IT services, space | Semiconductors, digital economy |
Appendix 7
Main decisions of the Competition Commission of India (CCI) in the digital sector (2010–2025)
| Case (year) | Company(s) concerned | Contract / object | Qualification | Decision / solution | Penalties | Observations (CUTS / doctrine / effects) |
| Google Android(2022) | Android mobile OS / GMS licenses | Abuse of a dominant position (Art. 4 Competition Act) | Imposition of anti-competitive conditions (pre-installation, bundling apps, restriction forks Android) | Fined ≈ INR 13.38 billion (Indian Rupees), i.e. €136.5 million + injunction to cease and desist | As early as 2016, CUTS had warned of the risks of OEM lock-in and manufacturers’ structural dependence on the Android ecosystem | |
| Google Play Store(2022) | App store / in-app payments | Abuse of dominant position | Imposition of the Google Play Billing System and restriction of alternative payments | Fined ≈ INR 93.6 billion or €95.6 million + behavioural injunctions | CUTS has criticized the lock-in effects on developers and fintechs, including in several policy briefs on app marketplaces | |
| Google Android TV (2025 policy) | Smart TV ecosystem | Restriction of competition via pre-installation | Settlement Agreement: Play Store / Play Services Separate Licenses | Penalty reduced ≈ INR 202.4 million or €2.1 million | CUTS highlights that TV ecosystems are a new front in digital competition in India | |
| WhatsApp / Meta(2024) | Meta (WhatsApp) | Personal data / indirect competition | Abuse of dominant position via terms of use | 2021 Privacy Policy Sanction | Fined ≈ INR 2.13 billion or €21.7 million | CUTS and IFF supported the « consumer welfare + data dominance » reading of the decision |
| Google Search advertising complaint(dismissal 2024) | Online Advertising | Lack of sufficient evidence of abuse | ICC refuses to open an investigation | No sanctions | CUTS notes that low evidentiary capacity in digital markets limits ex-post effectiveness | |
| Android ecosystem(court appeal 2025) | Android Ecosystem | Appellate Litigation (NCLAT / Supreme Court) | ICC decision partially challenged | Not final |
* Narendra Modi, English rendering of Prime Minister Shri Narendra Modi’s Address at the Launch of « Make in India » Global Initiative, Vigyan Bhawan, New Delhi, 25 September 2014; formula: « Come, make in India. Sell anywhere, but manufacture here. Full text available from the Press Information Bureau of the Government of India and on the official website of the Indian Prime Minister.
[1] Peter F. Drucker, Management Challenges for the 21st Century, New York, HarperBusiness, 1999, IX-207 p., esp. pp. 161-184 (on the knowledge society, innovation and the challenges of the twenty-first century). Peter F. Drucker, The Essential Drucker. The Best of Sixty Years of Peter Drucker’s Essential Writings on Management (New York: HarperCollins Publishers, 2001), XXV-358 p., spec. pp. 273-287. The formula often attributed to the author—« The best way to predict the future is to create it »—faithfully summarizes his strategic thinking, although its exact textual origin is the subject of doctrinal debate.
[2] This paper is part of a broader research program devoted to the contemporary transformations of the industrial state in the face of globalization, the recomposition of value chains and the emergence of new policies of economic sovereignty. It builds on previous work on the industrial policies of China, the United States, Japan, South Korea and Taiwan, as well as studies on European competition policy, economic sovereignty, foreign investment controls, foreign subsidy controls and the regulation of digital markets. to which reference will be made throughout this study.
[3] Jagdish N. Bhagwati and Arvind Panagariya, India’s Trust with Destiny. Debunking Myths that Undermine Progress and Addressing New Challenges, New York, Collins Business, 2012, XXVIII-564 p., pp. 1-45, pp. 147-198 and pp. 379-426; OECD Economic Surveys: India, Paris, OECD Publishing, various editions (2005, 2007, 2009, 2011, 2014), chaps. I and II.
[4] India Planning Commission, Eleventh Five Year Plan (2007-2012). Inclusive Growth, New Delhi, Oxford University Press, 2008, 3 vols., esp. vol. I, pp. 25-54 and pp. 187-231; Planning Commission, Twelfth Five Year Plan (2012-2017). Faster, More Inclusive and Sustainable Growth, New Delhi, SAGE Publications India, 2013, vol. I, 326 p., pp. 19-61 and pp. 87-126; Government of India, National Manufacturing Policy, New Delhi, Ministry of Commerce and Industry, Department of Industrial Policy and Promotion, 2011, 32 p., pp. 3-18; National Institution for Transforming India (NITI Aayog), Strategy for New India @75, New Delhi, 2018, 312 p., p. 31-74 (to put into perspective the reforms undertaken since the 2000s).
[5] Arvind Panagariya, India: The Emerging Giant, Oxford, Oxford University Press, 2008, XXIV-533 p., pp. 25-78; Jagdish Bhagwati and Arvind Panagariya, India’s Tryst with Destiny. Debunking Myths that Undermine Progress and Addressing New Challenges, New York, Collins Business, 2012, XXVIII-564 p., p. 1-60; OECD Economic Surveys: India, Paris, OECD Publishing, 2007, 184 p., pp. 17-54
[6] Bimal Jalan, India’s Economic Policy. Preparing for the Twenty-First Century, New Delhi, Viking/Penguin Books India, 1992, XVI-328 p., pp. 15-78; Tirthankar Roy, An Economic History of India 1857-2010, 3rd ed., New Delhi, Oxford University Press, 2011, XVI-350 p., pp. 233-311.
[7] Government of India, National Manufacturing Policy, New Delhi, Ministry of Commerce and Industry, Department of Industrial Policy and Promotion, 2011, 32 p., pp. 3-18; Planning Commission, Eleventh Five Year Plan (2007-2012). Inclusive Growth, vol. I, New Delhi, Oxford University Press, 2008, pp. 25-54 and pp. 187-231; World Bank, Doing Business 2004. Understanding Regulation, Washington D.C., 2003, pp. 1-34.
[8] Government of India, National Manufacturing Policy, Ibid. ; Planning Commission, Eleventh Five Year Plan (2007-2012). Ibid.; World Bank, Doing Business 2004, Ibid.
[9] Confederation of Indian Industry, India at 75. The Future of Indian Manufacturing, New Delhi, 2004, pp. 5-42; World Bank, Global Economic Prospects and the Developing Countries 2002, Washington, D.C., 2002, pp. 39-76; UNCTAD-UNCTAD, World Investment Report 2002. Transnational Corporations and Export Competitiveness, Geneva, United Nations, 2002, pp. 149-186.
[10] Vijay Joshi, India’s Long Road. The Search for Prosperity, New Delhi, Viking, 2016, XVIII-376 p., pp. 1-38, pp. 129-176 and pp. 295-334; Arvind Subramanian, India’s Turn. Understanding the Economic Transformation, New Delhi, Oxford University Press, 2008, pp. 201-264; OECD Economic Surveys: India, Paris, OECD Publishing, 2014, pp. 15-47 and pp. 91-124.
[11] WTO-WTO, World Trade Report 2008. Trade in a Globalizing World, Geneva, 2008, pp. 15-63; UNCTAD, World Investment Report 2005. Transnational Corporations and the Internationalization of Research and Development (R&D), New York and Geneva, United Nations, 2005, xxxii + 332 p., pp. 23-76.
[12] Barry Naughton, The Chinese Economy. Transitions and Growth, Cambridge, Mass.: MIT Press, 2007, pp. 371-439; Arvind Panagariya, India: The Emerging Giant, op.cit., pp. 301-378
[13] Reserve Bank of India, Handbook of Statistics on the Indian Economy, Mumbai, Reserve Bank of India, Annual Editions 2003-2004 to 2023-2024, including chapters on national accounts, industry, foreign trade and investment; Government of India, Ministry of Commerce and Industry, Department of Commerce, Export Import Data Bank, New Delhi, Annual Statistical Series 2001-2002 to 2024-2025; World Trade Organization, International Trade Statistics, Geneva, WTO, annual editions 2003 to 2014, especially the sections on merchandise trade, services and statistics by country.
[14] World Bank, Doing Business, various editions 2005-2014; United Nations Conference on Trade and Development, World Investment Report 2010. Investing in a Low-Carbon Economy, Geneva, spec. statistical developments on Asia.
[15] Planning Commission, Eleventh Five Year Plan, supra; Government of India, National Manufacturing Policy, 2011, esp. pp. 3-18.
[16] OECD, Interconnected Economies. Benefiting from Global Value Chains, Paris, OECD Publishing, 2013, 312 p., pp. 15-74; UNIDO, Industrial Development Report 2013. Sustaining Employment Growth, Vienna, pp. 93-151.
[17] Vijay Joshi, India’s Long Road, op.cit.., pp. 177-236; NITI Aayog, Strategy for New India @75, New Delhi, 2018, pp. 31-74.
[18] India Planning Commission, Eleventh Five Year Plan (2007-2012). Inclusive Growth, New Delhi, Oxford University Press, 2008, 3 vol.et in particular vol. I, pp. 19-61 and pp. 187-231; Twelfth Five Year Plan (2012-2017). Faster, More Inclusive and Sustainable Growth, New Delhi, SAGE Publications India, 2013, vol. I, 326 p., pp. 21-69 and pp. 113-154.
[19] India Planning Commission, op. cit.; OECD Economic Surveys: India, Paris, OECD Publishing, 2014, pp. 91-138.
[20] The Delhi-Mumbai Industrial Development Corridor is a project that was developed on a model inspired by the extended industrial corridors or parks of Hsinchu (Taiwan), Tsukuba (Japan) or Daedeok Innopolis (South Korea). See, in this regard, Delhi-Mumbai Industrial Corridor Development Corporation Ltd. (DMICDC), Master Development Plan – Delhi-Mumbai Industrial Corridor, New Delhi, Ministry of Commerce and Industry, first versions 2008-2010, revised versions until 2023; Annual Report 2022-2023, New Delhi, 2023, esp. pp. 12-58; Japan International Cooperation Agency (JICA), The Comprehensive Development Plan for the Delhi-Mumbai Industrial Corridor, Final Report, Tokyo/New Delhi, October 2008, 11 vols., Esp. Vol. I, pp. 1-126 and Vol. II, pp. 1-215; Asian Development Bank, South Asia Subregional Economic Cooperation Operational Plan 2016-2025, Manila, ADB, 2016, esp. pp. 37-81; Asian Economic Integration Report 2018, Manila, ADB, 2018, esp. pp. 65-10.
[21] Government of India, National Manufacturing Policy, New Delhi, Ministry of Commerce and Industry, Department of Industrial Policy and Promotion, 2011, 32 p., pp. 3-24; United Nations Industrial Development Organization, Industrial Development Report 2013. Sustaining Employment Growth, Vienna, pp. 183-214.
[22] Confederation of Indian Industry, Manufacturing Competitiveness Study, New Delhi, various editions; Federation of Indian Chambers of Commerce and Industry, Industrial Competitiveness Reports, various editions; NITI Aayog, Strategy for New India @75, New Delhi, 2018, pp. 31-74 (putting it into perspective).
[23] See, in particular, Kelkar (Vijay L.) and Shah (Ajay), In Service of the Republic. The Art and Science of Economic Policy, New Delhi, Penguin Allen Lane, 2019, pp. 1-84 and pp. 247-399; Kelkar (Vijay L.), « Economic Reforms Agenda: Micro, Meso and Macro Economic Reforms », in Kapila (Uma) (ed.), A Decade of Economic Reforms in India, New Delhi, Academic Foundation, 2002, pp. 63-94; Kelkar (Vijay), « The Shankar Aiyar Memorial Lecture: Fiscal Reforms in a Federal Framework, » Review of Market Integration, Vol. 8, Nos. 1-2, 2016, pp. 103-111; Government of India, Report of the Task Force on Implementation of the Fiscal Responsibility and Budget Management Act, 2003, New Delhi, Ministry of Finance, 2004; Arvind Panagariya, India: The Emerging Giant, op.cit., pp. 379-471.
[24] Government of India, Make in India, New Delhi, Ministry of Commerce and Industry, 2014; National Manufacturing Policy, New Delhi, Ministry of Commerce and Industry, 2011, pp. 3-24; NITI Aayog, Strategy for New India @75, New Delhi, 2018, pp. 31-74.
[25] NITI Aayog, Strategy for New India @75, op.cit., pp. 75-146 ; OECD, OECD Economic Surveys: India, Paris, OECD Publishing, 2019, pp. 41-96; World Bank, India Development Update, Washington D.C., various editions 2018-2024.
[26] UNCTAD, World Investment Report, Geneva, various editions 2019-2024; OECD, Economic Outlook for Southeast Asia, China and India, Paris, various editions; Asian Development Bank, Asian Development Outlook, Manila, various editions.
[27] Government of India, Ministry of Commerce and Industry, Make in India, New Delhi, 2014; OECD, OECD Economic Surveys: India, Paris, OECD Publishing, 2015, pp. 33-68.
[28] On Narendra Modi’s training and initial career, see V. C. Jaffrelot, Narendra Modi: The Making of a Prime Minister, New Delhi, Harper Collins India, 2014, pp. 27-44; R. Hansen, Brahminism and Political Mobilization in India, Princeton University Press, 2020, pp. 198-214. It should be noted that Modi does not have a classic technocratic trajectory (engineering, economics, law or senior administration), but a political path built within the organization of the Rashtriya Swayamsevak Sangh and then the Bharatiya Janata Party, with a gradual rise in responsibility in the party and government apparatus. Its profile thus differs from the administrative or economic elites traditionally associated with the formulation of industrial policies in India
[29] On Narendra Modi’s political trajectory and economic orientations, see in particular C. Jaffrelot, Narendra Modi: The Making of a Prime Minister, New Delhi, Harper Collins India, 2014, pp. 45-112 and pp. 189-244; S. Aiyar, The Modi Doctrine: New Paradigms in India’s Economic Policy, New Delhi, Juggernaut Books, 2018, pp. 21-76; C. Wong and R. Gupta (eds.), Gujarat under Modi: Economic Development and Governance, New Delhi, Routledge India, 2015, pp. 1-58.
On the economic foundations of the policy pursued from 2014 onwards and its continuities with previous reforms, v. NITI Aayog, Strategy for New India @75, New Delhi, 2018, pp. 11-62; Ministry of Finance, Economic Survey of India 2014-2016, New Delhi, Government of India Press, esp. chap. 1 and 2.
On the intellectual influences and networks of economic advisers surrounding the Prime Minister, see Arvind Panagariya, India: The Emerging Giant, Oxford University Press, 2008, pp. 379-420 (for liberal doctrinal continuities); Raghuram Rajan, The Third Pillar, New York, Penguin Press, 2019, esp. pp. 267-312 (on the tensions between growth, institutions and federal governance). Also, Bibek Debroy, An Agenda for Improving Governance, New Delhi, Academic Foundation, 2003, xvi + 330 p., pp. 1-98 and pp. 187-285. Although it predates NITI Aayog, this book is major because it already sets out the principles that will guide its work later: administrative simplification, state efficiency, regulatory reform and economic governance. See also B. Debroy, India Beyond the Pandemic. A Sustainable Recovery, New Delhi, Rupa Publications, 2021, xii + 220 p., esp. p. 89-176. This book links structural reforms, industrial policy and competitiveness. Finally, see the reports to which Bibek Debroy has directly contributed to NITI Aayog: NITI Aayog, Strategy for New India @75, New Delhi, Government of India, 2018, xviii + 322 p., in particular pp. 75-146 (industry, infrastructure, innovation), pp. 223-322 (governance, institutional reforms and improvement of the business climate). Also NITI Aayog and IDFC Institute, Ease of Doing Business: An Enterprise Survey of Indian States, New Delhi, Government of India, 2017, xviii + 238 p., in particular pp. 15-46, pp. 83-118 and pp. 161-201 (regulatory simplification, one-stop shop, administrative constraints, labour market reforms and access to finance).
On the Industrial and Strategic Dimensions of Contemporary Indian Economic Policy, OECD Economic Surveys: India, Paris, OECD Publishing, 2015-2019, pp. 33-98; World Bank, India Development Update, Washington D.C., various editions 2016-2023, chapter on investment and the business environment. Finally, on the geo-economic and strategic dimension of the government entourage and recent doctrinal inflections, v. Observer Research Foundation, India’s Economic Security and Industrial Strategy, New Delhi, 2018-2024 reports; Ministry of Commerce and Industry, Make in India: Progress Reports, New Delhi, various editions.
[30] World Bank, Doing Business Report, Washington D.C., 2015-2018 editions; NITI Aayog, Strategy for New India @75, New Delhi, 2018, pp. 55-102
[31] Delhi Mumbai Industrial Corridor Development Corporation, Project Reports, New Delhi, various editions; Asian Development Bank, India: Industrial Corridor Development, Manila, 2016, pp. 21-74.
[32] OECD, Economic Survey of India, Paris, 2019, p. 88-132; Government of India, State Industrial Policy Reports, various administrations, 2015-2022.
[33] UNCTAD, World Investment Report, Geneva, 2015-2023 editions; World Economic Forum, Global Competitiveness Report, Geneva, various editions.
[34] OECD Economic Surveys: India 2021, Paris, OECD Publishing, 2021, 172 p., p. 41-88; World Bank, India Development Update: Financing Growth, Washington D.C., World Bank Group, 2022, 146 p., chap. 2 (« Industrial competitiveness and investment climate »), pp. 53-91.
[35] Government of India, Ministry of Commerce and Industry, Production Linked Incentive (PLI) Schemes: Consolidated Guidelines, New Delhi, 2020, 68 p., spec. p. p. 7-29; idem, PLI Scheme for Large Scale Electronics Manufacturing, 2021, 52 p., spec. p. p. 11-38; UNCTAD, World Investment Report 2022. International Tax Reforms and Sustainable Investment, Geneva, United Nations, 2022, 210 p., pp. 112-147.
[36] Asian Development Bank, Asian Development Outlook 2023: India, Manila, ADB, 2023, 284 p., p. 137-182; Delhi-Mumbai Industrial Corridor Development Corporation, Master Plan Overview, New Delhi, Government of India / JICA cooperation, 2019, 96 p., pp. 21-63; Japan International Cooperation Agency (JICA),DMIC Project Appraisal and Industrial Corridor Strategy Report, Tokyo, JICA, 2018, 118 p., p. 33-77.
[37] OECD Investment Policy Reviews: India 2020, Paris, OECD Publishing, 2020, 196 p., pp. 45-102; World Bank, Doing Business 2020, Washington D.C., 2020, 236 p., p. 4-37 (Ease of Doing Business indicators – India profile).
[38] UNCTAD, World Investment Report 2023. International Tax Reforms and Sustainable Investment, Geneva, United Nations, 2023, 232 p., p. 89-132; International Energy Agency, Energy Technology Perspectives 2022, Paris, OECD/IEA, 2022, 402 p., p. 211-268; OECD Digital Economy Outlook 2020, Paris, OECD Publishing, 2020, 312 p., p. 133-176.
[39] UNCTAD, Ibid.; IEA, Ibid.; OECD, Ibid.
[40] François Souty, « The recomposition of the Taiwanese industrial state since China’s accession to the WTO (2001-2026): From globalization to economic security« , Le Diplomate Média, July 1, 2026, 33 p.F. Souty, « The Transformation of South Korean Industrial Policy (1997-2025): From the Asian Crisis to Economic Security », Le Diplomate Média, 24. June 2026, 40 p.; F. Souty, « The transformation of Japanese industrial policy in the face of the Chinese challenge and American digital domination (2001-2025): from the Developmental State to the Economic Security State« , Le Diplomate Média, 17 June 2026, 53 p.; F. Souty, « The return of the strategic state: the industrial policy of the United States between power, national security and technological competition (2001-2025) », Le Diplomate Média, 11 June 2026, 45 p.; F. Souty, « Industrial and Competition Policy in China since 2001: A Strategic Convergence at the Antipodes of the European Model? « , Le Diplomate Média, 3 June 2026, 43 p.
[41] OECD Economic Outlook 2023: Long-term scenarios, Paris, OECD Publishing, 2023, pp. 61-104; World Bank, Global Economic Prospects, Washington D.C., 2022-2024 editions, chap. « Trade fragmentation and investment shifts ».
[42] UNCTAD, World Investment Report 2023, Geneva, United Nations, 2023, pp. 77-121; International Energy Agency, World Energy Outlook 2023, Paris, OECD/IEA, 2023, pp. 213-258.
[43] International Energy Agency, Energy Technology Perspectives 2023, Paris, OECD/IEA, 2023, p. 145-210; OECD, Trade in Critical Raw Materials and Semiconductors, Paris, 2023, pp. 33-79; Government of India, Ministry of Electronics and IT, Semiconductor Mission Reports, New Delhi, 2021-2024.
[44] Asian Development Bank, Asian Economic Integration Report 2024, Manila, ADB, 2024, pp. 88-132; Indo-Pacific Economic Framework for Prosperity, official framework documents, 2022-2024.
[45] World Bank, India Development Update 2024, Washington D.C., 2024, pp. 41-96; OECD, Global Value Chains and Development, Paris, OECD Publishing, 2022, pp. 119-168.
[46] UNCTAD, Trade and Development Report 2023, Geneva, United Nations, 2023, pp. 55-102; World Economic Forum, Global Risks Report 2024, Geneva, 2024, pp. 17-63.
[47] World Bank, Ibid. ; OECD Economic Surveys: India 2023, op.cit., pp. 33-78.
[48] Asian Development Bank, Asian Development Outlook 2024: India, Manila, 2024, pp. 121-168; International Labour Organization, India Employment Report 2023, Geneva, ILO, 2023, pp. 55-104.
[49] Government of India, Planning Commission / NITI Aayog, State Economic Performance Reports, New Delhi, 2018-2023 editions, p. 12-67; OECD, Multi-level Governance in India, Paris, 2022, p. 39-88.
[50] World Bank, Doing Business Legacy Assessment: India, Washington D.C., 2021, pp. 18-54; UNCTAD, World Investment Report 2023, Geneva, pp. 89-134.
[51] Asian Development Bank, Asian Development Outlook 2024: India, Manila, 2024, pp. 119-164.
[52] A. Subramanian, « India’s Growth Model Reconsidered », Peterson Institute Working Paper, 2019, pp. 12-38; Raghuram Rajan, The Third Pillar, New York, Penguin Press, 2019, pp. 211-260; Dani Rodrik, Straight Talk on Trade, Princeton University Press, 2018, pp. 89-132.
[53] Kaushik Basu, An Economist in the Real World, MIT Press, 2016, pp. 173-214.
[54] World Bank, India Jobs Report, Washington D.C., 2023, pp. 44-88; Organisation for Economic Co-operation and Development, Economic Surveys: India 2023, pp. 77-112.
[55] Lant Pritchett, « A Note on Jobless Growth in India », Harvard Kennedy School Working Paper, 2018, pp. 3-21; International Labour Organization, India Employment Report 2023, Geneva, pp. 55-104.
[56] World Bank, op.cit., 2022, pp. 21-67; OECD Multi-level Governance Studies: India, Paris, 2022, pp. 33-82.
[57] World Bank, India: Subnational Competitiveness and Industrial Performance, Washington D.C., 2020, pp. 44-110.
[58] OECD Economic Surveys: India 2023, Paris, 2023, pp. 93-128.
[59] Asian Development Bank, Asian Development Outlook 2024: India, Manila, 2024, pp. 121-168.
[60] Government of India, Ministry of Finance, GST Implementation Reports, New Delhi, 2017-2023, pp. 12-58.
[61] CUTS International, Industrial Policy and Market Structure in India, Jaipur, CUTS CCIER, 2024, p. 4-18.
[62] Raghuram Rajan, The Third Pillar, Penguin Press, 2019, pp. 211-260.
[63] World Bank, India Development Update 2024, Washington D.C., 2024, pp. 61-98.
[64] World Bank, India Jobs Report 2023, Washington D.C., 2023, pp. 55-102.
[65] International Labour Organization, India Employment Report 2023, Geneva, 2023, pp. 52-97.
[66] Government of India, Monopolies and Restrictive Trade Practices Act, New Delhi, 1969; Government of India, Competition Act 2002, New Delhi, 2002.
[67] CUTS International, Reorienting Competition Policy and Law in India, Jaipur, CUTS CCIER, 2002, pp. 11-46; CUTS International, Competition Policy and Consumer Welfare in Developing Economies, Jaipur, 2003, pp. 23-58.
[68] CUTS International, Towards a Functional Competition Policy for India, Jaipur, CUTS CCIER, 2005, vol. I–II, pp. 1-112; CUTS International, Competition Issues in Infrastructure and Manufacturing Sectors in India, Jaipur, 2007, pp. 37-89.
[69] CUTS International, India Competition and Regulation Report 2013, Jaipur, CUTS CCIER, 2013, pp. 55-102; CUTS International, Competition and Digital Markets in India, Policy Brief, 2018, pp. 12-41.
[70] CUTS International, India Competition and Regulation Report 2023, Jaipur, CUTS CCIER, 2023, p. 17-66; CUTS International, Artificial Intelligence and Competition Law – India and Japan Comparative Analysis, 2026, p. 5-39.
[71] OECD Economic Outlook 2024: Fragmentation and Industrial Policy, Paris, 2024, pp. 61-104; World Bank, Global Economic Prospects 2024, Washington D.C., chap. « Geoeconomic fragmentation », pp. 27-73.
[72] International Monetary Fund, World Economic Outlook 2024, Washington D.C., pp. 112-158; Asian Development Bank, Asian Economic Integration Report 2024, Manila, pp. 88-132.
[73] Government of India, Ministry of Electronics and IT, Semiconductor Mission Reports 2021–2024, New Delhi, pp. 11–66; United Nations Conference on Trade and Development, World Investment Report 2023, Geneva, pp. 77-121.
[74] World Bank, India Development Update 2024, Washington D.C., pp. 41-96.
[75] CUTS International, Global Value Chains, Industrial Upgrading and Policy Trade-offs in India, Jaipur, CUTS CCIER, Policy Brief 2024, pp. 4-22.
[76] Indo-Pacific Economic Framework for Prosperity, Official Documents 2022–2024.
[77] CUTS International, Industrial Policy in a Fragmenting Global Economy, Jaipur, 2023, pp. 6-24.
[78] Government of India, Information Technology Act 2000, New Delhi, 2000; Ministry of Electronics and Information Technology (MeitY), Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, New Delhi, 2021
[79] Internet Freedom Foundation, Reports on Digital Rights and Platform Regulation in India, New Delhi, 2019–2024; see, in particular, contributions to the UN Human Rights Committee Review of India, 2024
[80] World Bank, Digital Public Infrastructure: Scaling Inclusive Growth, Washington D.C., 2023, pp. 11-56
[81] Government of India, Digital Personal Data Protection Act, New Delhi, 2023; Ministry of Electronics and Information Technology, DPDP Rules 2025, New Delhi, 2025
[82] Competition Commission of India, Orders in Digital Markets Cases (Google, Amazon, Meta), New Delhi, 2019–2025
[83] Competition Commission of India, Orders in Digital Markets Cases (Google, Amazon, Meta), New Delhi, 2019–2025
[84] CUTS International, Competition and Digital Platforms in India, CUTS CCIER Policy Brief, Jaipur, 2023; CUTS International, Artificial Intelligence and Competition Policy in Emerging Economies, 2025
[85] OECD Economic Surveys: India 2023, Paris, 2023, pp. 19-54; World Bank, India Development Update 2024, Washington D.C., 2024, pp. 41-96.
[86] OECD Multi-level Governance Studies: India, Paris, 2022, pp. 33-82; World Bank, India State-Level Economic Governance, Washington D.C., 2022, pp. 21-67.
[87] United Nations, World Population Prospects 2024, New York, 2024, pp. 45-88.
[88] Government of India, Ministry of Finance, Goods and Services Tax: Implementation Reports 2017–2023, New Delhi, pp. 12–58.
[89] World Bank, India Jobs Report 2023, Washington D.C., pp. 55-102; UNCTAD, Digital Economy Report 2024, Geneva, pp. 91-134.
[90] OECD Economic Surveys: Japan 2023, Paris, OECD Publishing, 2023; World Bank, East Asia and Pacific Economic Update 2024, Washington D.C., World Bank Group, 2024, pp. 15-68.
[91] François Souty, op. cit., V. note 40.
[92] Raghuram Rajan, op.cit.
[93] Arvind Panagariya, op. cit.
[94] Ashoka Mody, India’s Economy: Performance and Challenges, World Bank Policy Research Working Paper No. 8547, Washington D.C., 2018, pp. 3-41; Ashoka Mody, India Becoming: A Political Economy of Transformation, Harvard University Press, Cambridge, 2023, pp. 77-118.
[95] CUTS International, Industrial Policy, Competition and Global Value Chains in Asia, CUTS Centre for Competition, Investment & Economic Regulation (CUTS CCIER), Jaipur, Policy Brief, 2024, pp. 4-26.
[96] Jean Drèze and Amartya Sen, An Uncertain Glory: India and its Contradictions, Princeton University Press, Princeton, 2013, pp. 21-64; Jean Drèze, « Development and Inequality in India », Economic and Political Weekly, Vol. 54, No. 2, 2019, pp. 12-27.
[97] European Commission, EU Industrial Strategy Update 2024, Brussels, 2024; OECD, OECD Industrial Policy in the Digital Age, Paris, OECD Publishing, 2024, pp. 11-62.
[98] John Chalmers, Industrial Policy and State Capacity in Japan, Oxford, Oxford University Press, 2021, pp. 44-91; Alice H. Amsden, The Rise of « The Rest »: Challenges to the West from Late-Industrializing Economies, Oxford, Oxford University Press, 2001, pp. 203-256
[99] Robert Wade, Governing the Market: Economic Theory and the Role of Government in East Asian Industrialization (Princeton: Princeton University Press, 2004), pp. 55-110.
[100] Jeff Kingston, Contemporary Japan: History, Politics, and Social Change since the 1980s, Hoboken, Wiley-Blackwell, 2019, pp. 132-174; Rajan Raghuram, « Fault Lines: How Hidden Fractures Still Threaten the World Economy, » Princeton University Press, 2010, pp. 87-121.
[101] OECD, OECD Science, Technology and Innovation Outlook 2024, Paris, 2024, pp. 63-118.
[102] CUTS International, Industrial Policy, Competition and Global Value Chains in Asia, CUTS Centre for Competition, Investment & Economic Regulation (CUTS CCIER), Jaipur, Policy Brief, 2024, pp. 4-26.
[103] Fernand Braudel, Civilisation matérielle, économie et capitalisme (XVe-XVIIIe siècle), t. III, Le Temps du monde, Paris, Armand Colin, 1979, 607 p., see in particular pp. 11-37 (the world-economies and their centres), pp. 69-114 (hierarchies of the world economy), pp. 127-174 (shifts in the economic centres of gravity) and pp. 483-548 (the transformations of economic power); see also F. Braudel, La Dynamique du capitalisme, Paris, Arthaud, 1985, 120 p., pp. 65-95.
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