Back in the late 1980s, when I was a young journalist, the media was busy discussing the monumental impact of Rajiv Gandhi’s initiatives to ease imports, and allow joint ventures with foreign firms. But as a business journalist, I and my colleagues had another preoccupation. For us, the paramount question was which Indian company will cross the Rs 1,000-crore annual revenue milestone? There were many contenders such as Reliance Industries, Steel Authority of India Ltd (SAIL), and Maruti Suzuki. This was a few years before the real reforms were undertaken in early 1991.

Today, Reliance Industries clocked an annual turnover of more than Rs Rs 10,00,000 crore, or thousand times the earlier milestone, in 2024-25. In 2024 (calendar year), Maruti Suzuki produced more than two million vehicles for the first time in a year. SAIL can produce almost 20 million tonnes per year, and will spend more than Rs 1,00,000 crore to hike it to 35 million by 2030-31. How has the state, and face, of Indian manufacturing changed in three-and-a-half decades?

Why are we talking about this now? In the late 1980s, at the threshold of reforms, and in the early 1990s, Indian manufacturing stood at one of its several catalyst points. Contrary to fears that it would break, it survived, and raced ahead of several countries. With the pandemic, disruptions, geopolitical tensions, and trade-tariff talks, 2025 seems like another cusp for Indian industry. If it crosses these humps, and obstacles, it can cross over into a grand uncharted territory, which can be highly profitable.

Let us go back to the 1980s and 1990s to understand how the future can unfold. A few months into 1991, Prime Minister PV Narasimha Rao unleashed economic reforms. There is a persistent myth that Finance Minister Manmohan Singh was instrumental in ushering in liberalisation. Those who reported on that era know that the real policy changes emanated from the industry ministry, and not the finance ministry. The former portfolio was held by Rao, who abolished industrial licensing. This marked the beginning of reforms.

Soon, the buzz shifted from Rs 1,000 crore to survival. India Inc, which was protected from global competition by high tariffs, and a closed socialist economy, would not be able to sustain the aggression of the foreigners, or new local competitors. One example stood out. Reliance Industries was known to thrive on political and policy management. How would it fare in the new open environment? The same was true for SAIL. Maruti was in a better space since it had access to the Japanese technology from Suzuki.

We know what has happened to Reliance Industries in the past 35 years. It has emerged as the global player in petrochemicals, and diversified into telecom and technology. It is the wealthiest stock in terms of market capitalisation (almost Rs 20 trillion). Its consolidated net profit in 2024-25 was more than Rs 80,000 crore, or a daily figure of more than Rs 200 crore. In one day, it earns more money than the annual numbers for most firms.

Let us swim to SAIL. In 1991, India’s annual steel-making capacity was less than 10 million tonnes. Today, the annual capacity is more than 200 million, and India is the second-largest steel producer in the world. Thirty-five years ago, SAIL accounted for 80 per cent of the country’s capacity. A mere two million tonnes or so were produced by the private sector players like Tata Steel. Today, SAIL accounts for a mere 20 million. The bulk comes from the private players.

During the 1980s, when Prime Minister Rajiv Gandhi allowed joint ventures with foreign companies in specific segments like two-wheelers, there was a fledgling venture called Hero Honda, which had set the two-wheeler market ablaze with innovative advertising, and fuel-efficient motorcycles. Despite a partnership with the Japanese Honda, there were concerns about its future in the post-reforms period. Like in the case of Suzuki, there were speculations that Honda would leave Hero in the lurch.

It did happen. A few years ago, Hero and Honda broke their business marriage, and joint venture. Both went their separate ways. For many, it was evident that the new Hero Motor Corp would be swamped by Honda India, given that the latter possessed innovative technology. Until then, Hero rode on the tech superiority and R&D of Honda. For a while after the breakup, it did look as if Honda would obliterate Hero. The sales of the former matched Hero’s within no time. Over time, a new reality emerged. Hero Motor Corp held on, remained the market leader, became the largest two-wheeler company in the world, and left Honda behind.

In my previous articles, I looked at the miracle in the iPhone manufacturing ecosystem in India. A lot has happened in the pharmaceutical sector, and many Indian firms export up to 50 per cent of their produce to the US. The auto components segment has picked to keep pace with the auto growth, and exports. India has emerged as the world’s auto hub. So, we are possibly looking at a possibility, a faint one, that India can emerge as a manufacturing powerhouse, and a global hub across various sectors.

Thanks to schemes like the production-linked incentive (PLI) schemes, which have worked on-and-off, efficiently in some sectors, there is a substantial increase in domestic production, and value-added. For instance, the value-added in iPhone went up from 2-3 per cent to 20 per cent. Although the key components are still imported, and that too from China, and some experts believe India is an assembler, the value-added may rise to 40 per cent in a few years.

This is a remarkable success story. But let me add a caveat, a big if. For the past few decades, the real story of Indian manufacturing is one of so near, yet so far. Let us take an example. Thanks to PLI, and happenings in iPhone, consumer electronics exports in 2024-25 were a healthy $40 billion. It is a figure that no policy-maker, businessman, or analyst would have even imagined a decade ago.

However, in 2024-25, consumer electronics exports from Vietnam were an unbelievable $130 billion. Vietnam is a tiny country compared to India. Of course, how can one forget textiles? When China joined the WTO in 2000, India’s readymade garments exports were about $10 billion. They crossed $20 billion over two decades. In the same period, China went up from zero to $200 billion. Nations like Bangladesh compete with us, and many Indian entrepreneurs have shifted production bases to the neighbouring nation.

This is what I mean when I say Indian manufacturing has raced ahead, ran well, but faltered before the finish line. Unless we initiate second-generation reforms in land, labour, laws, and other areas, we cannot become a Vietnam, forget about China.

The author has worked for leading media houses, authored two books, and is now Executive Director, C Voter Foundation