What is Industrial Policy?
Historical Background
Key Points
7 points- 1.
Objectives: Aims to boost manufacturing, create employment, enhance exports, foster innovation, achieve self-reliance, and ensure balanced regional development.
- 2.
Tools and Instruments: Includes providing subsidies (e.g., for R&D, specific sectors), tax incentives (e.g., lower corporate tax rates), tariff protection for domestic industries, infrastructure development (e.g., industrial corridors, special economic zones), and skill development programs.
- 3.
Sectoral Focus: Can be general (horizontal, e.g., promoting R&D across sectors) or specific (vertical/sectoral, e.g., National Civil Aviation Policy, National Manufacturing Policy).
- 4.
Regulatory Framework: Involves setting up appropriate regulatory bodies and policies to guide industrial growth and ensure fair competition.
- 5.
Investment Promotion: Attracting both domestic and foreign direct investment (FDI) through policy stability and ease of doing business.
- 6.
Public Sector Role: Historically, public sector undertakings (PSUs) played a dominant role; now, the focus is on their efficiency and strategic divestment.
- 7.
Recent Shift: Emphasis on 'Make in India' and 'Atmanirbhar Bharat' initiatives, coupled with Production Linked Incentive (PLI) schemes to boost domestic manufacturing in key sectors.
Recent Developments
5 developmentsImplementation of Production Linked Incentive (PLI) schemes across 14 key sectors to boost domestic manufacturing and exports.
Focus on 'Atmanirbhar Bharat' (Self-Reliant India) to reduce import dependence and strengthen domestic supply chains.
Emphasis on ease of doing business reforms to attract investment and facilitate industrial growth.
Promotion of sunrise sectors like semiconductors, green energy, and advanced electronics through targeted policies.
Debate on the effectiveness of protectionist measures versus open market policies in achieving industrial growth.
This Concept in News
2 topicsInside Unitree's Rise: A Glimpse into China's Tech Ambitions
20 Feb 2026The news about Unitree's rise in the robotics market exemplifies how industrial policy can shape a nation's technological landscape. (1) It highlights the aspect of targeted support for specific industries deemed strategically important. (2) The news demonstrates how China's industrial policy, through financial incentives and regulatory support, has enabled Unitree to achieve significant growth and global recognition. (3) This reveals the potential for industrial policy to accelerate technological innovation and create competitive advantages. (4) The implications are that countries with well-designed and effectively implemented industrial policies can become leaders in emerging technologies. (5) Understanding industrial policy is crucial for analyzing the news because it provides the framework for understanding the government's role in fostering the growth of the robotics industry and its potential impact on the global economy. Without this understanding, the news might be seen as simply a company's success story, rather than a reflection of broader government strategies.
INS Reports Domestic Newsprint Production Meets Only 40% of Demand
17 Feb 2026The news about newsprint production underscores the need for a strategic industrial policy that focuses on reducing import dependence in critical sectors. This news highlights the aspect of industrial policy related to self-reliance and import substitution. The news event applies the concept of industrial policy by revealing a gap in domestic production capacity. This reveals that current policies may not be sufficient to meet domestic demand in all sectors. The implication is that the government needs to re-evaluate its industrial policy and consider measures to boost domestic production of essential goods like newsprint. Understanding industrial policy is crucial for analyzing this news because it provides a framework for understanding the government's role in shaping the industrial sector and addressing issues like import dependence. Without this understanding, it would be difficult to assess the effectiveness of current policies and suggest potential solutions.