​He highlighted that the Budget’s flagship ‘Biopharma Shakti’ programme, with its focused push on biopharma innovation and ecosystem development, can be a game-changer in positioning India as a global hub for advanced therapies and high-value manufacturing. He also noted that initiatives to build regional medical and tourism hubs, alongside support for electronics and semiconductor manufacturing, will strengthen healthcare delivery and accelerate localisation in critical segments such as medical devices.

Read here – https://www.pharmabiz.com

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He highlighted that the Budget has reiterated its focus on building capacity and developing the healthcare ecosystem through five healthcare and medical tourism hubs, along with initiatives to strengthen allied health professionals and care workers.

He further observed that the continued emphasis on electronics and semiconductor manufacturing in the Budget will indirectly benefit the medical devices industry by accelerating localisation of electronic medical components and devices.

Read here – https://medicircle.in

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​He highlighted that the Budget’s thrust on procedural reforms such as simplified licensing and faster input tax credit refunds will support ease of doing business for the chemicals industry. He also noted that while the announcement of three Chemical Sector Parks and the INR 20,000 crore allocation for CCUS projects are positive steps towards competitiveness and decarbonisation, more focused support for MSMEs and targeted incentives for green hydrogen and CBG should be prioritised.

Read here – https://chemindigest.com/

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He highlighted that sugar alternatives are costlier than conventional sugar and typically sell in lower volumes, which is why sugar-free beverages often command a 30–50% price premium. The article notes that brands are strategically using this segment to target a niche, higher-paying consumer base seeking healthier beverage options.

Read Here: https://www.livemint.com

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They highlighted that the global semiconductor shortage exposed structural weaknesses in India’s manufacturing model strong in assembly scale but lacking depth in domestic ecosystems, R&D, and high-value component capabilities. In a volatile and uncertain (VUCA) world, the authors note that competitiveness will increasingly depend on reliability, flexibility, innovation, and ecosystem strength rather than low-cost manufacturing alone.

In 2021, as India began reopening after COVID’s second wave, Maruti Suzuki’s Gurgaon plants were forced to pause production. The cause was not labour or logistics related issues, but a shortage of semiconductor chips. Mahindra reduced output. Tata Motors delayed deliveries. A disruption thousands of kilometres away in Taiwan wiped out billions of dollars in domestic output.

This episode was a stress test, and India failed it.

The global chip shortage exposed a fundamental weakness in India’s manufacturing model. We have built scale in assembly, but lack depth in industry ecosystems. In today’s volatile, uncertain, complex, and ambiguous (VUCA) world, India needs to play by a differentiated playbook. The next decade won’t reward countries that can simply manufacture cheaply. It will reward those that can manufacture reliably, flexibly, cleanly, and at speed.

India’s manufacturing baseline: Scale, informality, and weak capture

India is the world’s fifth-largest manufacturer with roughly $490 billion output, yet manufacturing’s share of GDP slipped from about 17% in 2010 to near 13% in 2024. In contrast, China is at ~25% and Vietnam at ~24.5% of GDP respectively.

India’s share in global merchandise exports has improved to ~1.8% (2024) with exports cited around ~$443B. It is a reminder that India is not yet a top-tier export manufacturing superpower.

Logistics is one of the biggest silent killers of manufacturing competitiveness. In 2023, India ranked 38^th on the World Bank’s Logistics Performance Index (LPI).

Sectoral snapshots are mixed. Electronics, automotive, pharmaceuticals are growth engines for the economy yet large volumes of components / raw materials are imported. Textiles are losing share to regional rivals like Bangladesh and Vietnam. The pattern is consistent: India wins entry-level assembly and scale, but undercaptures design, IP and high-value components.

Employment statistics underline the structural imbalance: manufacturing employs roughly 45 million people yet about 70% remain informal. Micro-units (averaging roughly 1–2 workers) account for a large share of employment but contribute a small fraction of gross value added. Formal firms generate most GVA; jobs remain precarious.

The VUCA Reality: Structural Disruptions Reshaping Manufacturing

VUCA is an operational reality in today’s world. Manufacturing is now being redesigned around it. Each element magnifies India’s structural weaknesses.

Volatility: Access to major markets and margins are losing stability due to geopolitical tensions, causing fluctuations in commodity and energy prices, aggressive trade policies, and the proliferation of non-tariff barriers (such as carbon levies and due diligence requirements). At the same time, demand volatility has become normal with high number of SKUs, shorter order cycles, lower forecast confidence.

Uncertainty: Trade restrictions, technology controls, and “friend-shoring” are forcing global companies to diversify capacity. Supply-chain weaponization, coupled by the fast-paced technological change, in industries like EV automotives and semiconductors have shortened investment horizons and increased the risk of stranded assets.

Complexity: A modern product is built through multi-country supply chains and multi-layer compliance. India’s internal complexities with regulatory variation across states, patchy enforcement, and jurisdictional delays add an estimated 8-10% to costs versus East Asian competitors. Logistical and infrastructural bottlenecks are also resulting in lack of agility or sluggish pace of operations.

Ambiguity: Companies are India strategic stance towards China is still unclear. We want reduced dependence, but the transition is difficult without deep domestic ecosystems. As Shashi Tharoor has also highlighted, this ambiguity is rooted in a consistent R&D deficit that leaves India reacting, instead of proactively building capabilities. Even in the emerging areas of green transition, the talk is often limited to sustainability targets. Several mechanisms like carbon reporting, procurement standards, etc. are still evolving.

VUCA therefore does what it must: it exposes shallow systems. Countries with dense local ecosystems endure; those without do not.

 Key Constraints Holding Back Indian Manufacturing

A notable, practical advantage has been a broadly depreciating rupee over recent years. This movement has been relatively gradual and predictable, effectively providing a modest, one-directional competitiveness tailwind for exporters (especially labour- and price-sensitive segments like textiles, certain auto components and basic electronics assembly). Predictable depreciation allows firms to hedge and price contracts with more confidence than a volatile regime would.

But the currency tailwind is limited. It increases input costs for import-dependent industries, disproportionately benefits low- and mid-value exports, and can conceal rather than address productivity flaws. Time is purchased with money; permanence is purchased with capability.

Manufacturing dominance is increasingly being built on innovation, rather than scale of factories. Process innovation, material science, design, and engineering capabilities are key to success. In electronics, autos, and machinery, labour can be a relatively small percentage of total cost. That changes the competitive logic from “labour cost arbitrage” to factors like yield, quality, reliability, etc.

However, India’s Gross R&D expenditure hovers around 0.6–0.7% of GDP, with low private-sector participation. By contrast, China and advanced East Asian economies invest multiple percentage points of GDP, driven primarily by private industry. The result: India imports critical inputs (chips, speciality chemicals, APIs), while domestic firms remain weak in design, materials science and translational engineering.

This capability gap is amplified by MSME fragmentation. MSMEs employ a large share of manufacturing labour but lack access to affordable credit, precision tooling, certification and digital processes; many face high certification costs that are beyond reach. Logistics and compliance costs remain high. With private R&D constrained (~0.25% of GDP in some measures), India assembles but rarely innovates at scale.

Why the next decade offers a different map

Three shifts change the calculus. First, China+1 is real: electronics FDI has accelerated, and India now assembles a meaningful share of global smartphones (Apple’s India output is an important signal). Second, policy levers (PLI schemes, MITRA parks, logistics investments) have unlocked substantial committed capital (PLIs alone attracting tens of billions). Third, domestic demand is growing fast: a large consumption base allows firms to scale before exporting.

These shifts matter, but they are conditional. They magnify returns for firms and regions that already possess ecosystem depth. Absent capability-building, inflows will create assembly islands, not integrated value chains.

Emerging Trends That Will Define Winners

Clusters are the practical unit of transformation. Countries like China and Vietnam won by building clusters with dense supplier ecosystems. Tamil Nadu’s EV ecosystem and Gujarat’s emerging semiconductor corridor demonstrate how anchor firms, suppliers, labs, skills and logistics compress lead times and reduce logistics costs by 30-40%, while circulating tacit knowledge locally. Shared testing and certification accelerate iteration and export readiness.

Productivity is being unlocked using digital tools, Industry 4.0 investments in India are expanding quickly, expected to be a multibillion-dollar landscape (estimates like $5.5 billion to $27 billion by 2033 show the direction). AI, IoT, cloud MES, and digital quality tools enable selective automation for mid-sized businesses, increasing uptime and yields without completely displacing workers.

Green rules are reshaping competitiveness. The EU’s CBAM makes coal-intensive production commercially risky (cost penalties of 20–30% for exposed exporters). Early decarbonisers secure market access and pricing resilience.

Services are fusing with manufacturing. India’s chip-design, software and systems capabilities can underpin a “design here, make here” model, capturing higher value across validation, design and system integration, not only assembly.

Finally, buyers now value proximity and predictability: many pay 5–10% premiums for suppliers within short flight times. In this environment, capability arbitrage overtakes cost arbitrage.

Strategic Imperatives: What Government and Industry Must Do

The policy prescription is straightforward and prioritised.

Create 8 to 10 mega-clusters. Each cluster should pair 3-4 global anchors with MSME networks, shared testing labs, bonded logistics and skill hubs. Evidence shows common facilities can cut MSME operating costs substantially, unlocking export readiness.

Industrialise skills. A 2% payroll contribution can fund industry-run academies and scaled apprenticeships; convert selected colleges into vocational powerhouses with majority shop-floor learning.

Enable MSME technology. Subsidised cloud ERP/MES, expanded tech-loan guarantees, and shared testing / certification facilities raise quality and traceability.

Ensure regulatory predictability. Digital single-window clearances, 30-day approvals and harmonised state rules are not administrative niceties; they are competitiveness levers.

Raise R&D ambition. Use public funds to crowd in private R&D, target translational centres in clusters, and tie PLI disbursements to supplier development and measurable technology transfer.

Conclusion

In today’s VUCA world, manufacturing competitiveness is not built on labour cost arbitrage. Rather, it requires the building blocks of ecosystems, resilience, productivity, and R&D-led innovation. India cannot industrialise by reassembling another country’s playbook. The decisive edge lies in ecosystems, clusters that combine skills, suppliers, labs, logistics and R&D. The rupee’s depreciation offers a helpful wind, but only capability and coordinated institutions will turn that breeze into sustained industrial flight. The world needs a trusted manufacturing alternative at scale, and India needs to develop the building blocks fast.

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He highlighted that the category is likely approaching a correction phase, following the typical cycle of early excitement, rapid capacity build-up, and eventual rationalisation. The article notes that after a period of heightened activity and investment, the men’s grooming segment may see consolidation as market realities begin to set in.

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Market & Strategic Implications

India’s recent interest in exploration of iso-butanol blending falls in line with the national biofuels policy of 2018. It can be directly linked to the country’s ambition to reduce crude oil imports and thus the vulnerability it faces from global market volatility, hence strengthening our energy security and providing with more resilience to global shocks.

India’s consumption of diesel stands at roughly 91.4 million tons as of FY 24-25, which constitutes about 39% of all petroleum products consumed. This large volume presents a substantial opportunity of substitution through blending of domestically produced alternative fuels. Although quite a few options are in the potential pipeline, iso-butanol has recently emerged as a strong candidate owing to its unique properties which provide for a better suitability for this initiative.

India’s diesel consumption for the current financial year upto September’25 stands at 45.8 MMT. The consumption pattern is distributed across sectors, ranging from transportation to power generation.

The Iso-butanol Differentiator

There are several factors which make isobutanol a much more suitable choice for diesel blending when compared to other potential alternatives such as ethanol and methanol. The key indicators are as follows:

• Isobutanol shows high miscibility and is able to form a homogeneous mixture with diesel without any phase separation, confirming its commercial readiness as a drop-in fuel additive. This addresses a major issue with blending Ethanol with diesel
• Reduced power for different blending ratios with higher ratios reflecting lower brake power. The average decreases in the break power is ~1.5% for 10% blended diesel fuel
• The mass of fuel consumed per unit of power produced (BSFC) showed an increase of ~3% for the same 10% blended diesel. This is equivalent to the ~7% drop in fuel efficiency for 20% Ethanol blended petrol.

 Retrofitting Excess Capacity Ethanol Plants for Isobutanol

Isobutanol has 2 major production routes: Chemical synthesis and biological fermentation. Biological fermentation is expected to gain prominence in India, following the path established by bio-based ethanol. Drawing similarity from the ethanol production process, the isobutanol setup can be achieved by minor changes to the already existing ethanol production process. This provides a unique opportunity for ethanol producers to diversify their products at a time when the ethanol capacity of the country stands at around 15-16 billion liters against a requirement of approximately 12 billion liters for E20 blending targets.

Global technology developers such as Gevo have developed proprietary processes that enable the retrofitting of existing ethanol plants to produce isobutanol. Compared to greenfield projects, such retrofits typically require significantly lower capital investment (Estimated $17 Mn for 68 Mn liters), as core infrastructure can be reused.

Viability Gap Funding

The prevailing market price of Isobutanol is slightly higher than the pre-tax price of diesel, creating a small viability gap that must be addressed through government support to enable an effective transition.* The isobutanol prices considered are based on chemical synthesis route
Drawing a parallel with the Ethanol Blending Program, it can be inferred that the post-blending retail price of diesel would remain unchanged, thereby preserving existing tax collections on diesel.

R&D and pilot projects

• Union Minister for Road Transport and Highways, Nitin Gadkari, stated in 2025 that the Automotive Research Association of India (ARAI) is conducting trials to evaluate a 10% isobutanol blend in diesel fuel
• Praj Industries, in partnership with Gevo Inc., is setting up a demonstration-scale fermentation module at a sugar mill in Maharashtra to produce isobutanol from molasses and sugarcane juice
• Kirloskar unveiled gensets powered by blended isobutanol, demonstrating the feasibility of diesel substitution in stationary equipment

These projects indicate the ongoing preparation from different industries to cater to the diesel isobutanol blending when the necessary policy and regulatory changes get introduced

Policy and regulatory support: Biofuels Mandates and SAF Adjacencies

Policy signals also provide a supportive backdrop:

• National Policy on Biofuels, 2018: Surplus biomass availability offers potential for production of bio-methanol & bio-butanol. An indicative target of 5% biodiesel blending is proposed by 2030
• GST rate for biodiesel supplied to the OMCs for blending with diesel was reduced from 12% to 5% from October 2021
• Isobutanol can also be used for processing SAF. India had embarked on a Sustainable Aviation Fuel (SAF) Feasibility Study. The targets are set at 1% blending by 2027, 2% by 2028 and 5% by 2030

Scale potential is real—but adoption hinges on economics, policy clarity, and ecosystem readiness

Isobutanol presents a credible pathway for diesel blending, offering better blend stability than ethanol or methanol and a relatively lower energy penalty. India’s excess ethanol capacity could potentially be repurposed through retrofits, enabling faster scale-up with lower capex than greenfield plants. However, wide-scale adoption will require overcoming key barriers. A parallel can be drawn with CBG, where real-world operating conditions have often delivered yields lower than theoretical assumptions, highlighting the importance of pilot-to-commercial learning loops before national scale-up.

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He highlighted that southern states are leading EV adoption not due to materially stronger incentives, but because of favourable urban density, shorter trip lengths, and well-developed intercity charging corridors. The article notes that cities and corridors such as Bengaluru–Chennai and Bengaluru–Hyderabad, along with Kerala’s linear urban sprawl along highways, significantly reduce range anxiety and make everyday EV usage more practical.

Read Here: https://www.business-standard.com

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He highlighted that India’s taxi network is expanding rapidly, driven not only by major aggregators but also by emerging local mobility apps. The article notes that most OEMs are now developing dedicated taxi models and service plans to tap this growing demand, as the cab segment evolves into a key growth arena for automakers.

Read Here: https://www.livemint.com

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He highlighted that while Shark Tank provides a sharp visibility boost and eases early consumer adoption, it does not create a lasting competitive moat. The article explains that the real advantage lies in faster distribution onboarding, especially across modern trade and quick commerce, while long-term success ultimately depends on repeat demand, strong unit economics, and operational fundamentals beyond the initial hype.

Read Here: https://www.livemint.com/companies

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He highlighted industry expectations around extending PLI and EV subsidies, strengthening EV infrastructure, and advancing vehicle scrappage policies. He also emphasised the need for higher allocations toward e-buses and R&D incentives, noting that India’s auto sector must transition from build-to-print manufacturing toward deeper technology ownership to remain globally competitive.

Read Here: https://www.tice.news

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He highlighted the need to raise healthcare spending to 2.5% of GDP in line with the National Health Policy, rationalise GST to address the inverted duty structure affecting MSMEs, expand the scope of the Pharma PLI to reduce API dependence on China, and revive the 200% weighted R&D deduction to strengthen innovation and long-term competitiveness in the Indian pharmaceutical industry.

Read Here: https://www.thehindubusinessline.com/markets/share-market-nifty-sensex-highlights-14th-january-2026/article70505277.ece

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