Make in India Stumbles on Port Bottlenecks

India’s ambitious “Make in India” initiative, launched in 2014 with aims to boost manufacturing to 25% of GDP by 2025, is falling short of its lofty goals.

Despite throwing billions at the problem through production-linked incentives (PLIs), the manufacturing sector stubbornly remains at ~15% of GDP. The latest salvo in this manufacturing crusade is a whopping $269 billion in PLIs, targeting everything from electronics to pharmaceuticals. It’s the economic equivalent of trying to will a manufacturing powerhouse into existence through sheer fiscal brute force.

But here’s the rub: India’s logistics infrastructure remains woefully inadequate. The country’s ports handle a mere 2.3% of global container throughput, compared to China’s 30%+. You can incentivize all the factories you want, but if you can’t efficiently get goods to market, you’re building economic Potemkin villages.

The government’s solution? Throw more money at the problem, naturally. The “Maritime India Vision 2030” (PDF) aims to inject $42 billion into ports and waterways. But with India consistently underspending on infrastructure (3.3% of GDP vs. targeted 7.7%).

Moreover, India’s female labor force participation languishes at ~30%, well below the global average of 53%. In a country desperate for manufacturing jobs, leaving half your potential workforce on the sidelines seems… suboptimal.

The kicker? Even as India struggles to hit its manufacturing targets, its vaunted demographic dividend has a looming expiration date. The dependency ratio is set to start rising in the 2040s, giving India a rapidly closing window to capitalize on its young workforce.