India Before and After Narendra Modi: An Analysis of Business, Manufacturing and the Economy

September 25, 2026

What changed between the pre-Modi decade and the Modi era — and where the transformation remains incomplete

By Suman Munshi | IBG NEWS

September 25, 2026

India’s economic story over the last two decades cannot be reduced to a single government, a single programme or a single statistic.

The period before Narendra Modi became Prime Minister in May 2014 included the rapid-growth years of the UPA-I government, followed by the global financial crisis, a strong post-crisis recovery and then a pronounced slowdown toward 2012–14.

The Modi period, beginning in 2014, included major structural reforms, a manufacturing push under Make in India, GST, the Insolvency and Bankruptcy Code, inflation targeting, digitalisation, PLI incentives and a large expansion of public infrastructure. It also included the unprecedented COVID-19 shock and the subsequent global supply-chain disruption.

A fair 10X analysis therefore needs to compare measurable outcomes, not political narratives.

For this analysis, the principal comparison is:

Pre-Modi: FY2004–05 to FY2013–14
Modi era: FY2014–15 to FY2024–25, with FY2025–26 figures used only where official data are already available.

Where comparable official series are unavailable, the nearest reliable series is identified rather than manufacturing a comparison.

It is important not to begin with the assumption that the pre-Modi period was economically stagnant.

It was not.

RBI historical data show real GDP growth averaging approximately 7.9% during 2003–04 to 2007–08 and 6.7% during 2009–10 to 2013–14. The latter period was pulled down substantially by the slowdown toward the end of the UPA-II period.

The Modi period has also produced strong growth, although its trajectory includes the COVID contraction and subsequent recovery. The Economic Survey estimated real GDP growth at 6.4% in FY2024–25 and projected 6.3–6.8% for FY2025–26 at the time of its release.

Therefore, the data do not support a simplistic proposition that India moved from “no growth” to “growth” after 2014.

The more useful question is:

Did the composition, scale and competitiveness of Indian business change after 2014?

The evidence is much more revealing there.

Foreign investment provides one of the clearest measurable differences.

According to government data, India received approximately US$308 billion in FDI during 2004–14.

During 2014–24, cumulative FDI inflows reached approximately US$667.4 billion — more than twice the preceding decade’s inflow. Manufacturing FDI during 2014–24 reached approximately US$165.1 billion, compared with US$97.7 billion during 2004–14.

The latest data show gross FDI inflows of approximately US$81.04 billion in FY2024–25, compared with US$36.05 billion in FY2013–14. Manufacturing FDI alone reached US$19.04 billion in FY2024–25.

What this means for Indian business

The Indian market increasingly became both:

a consumer destination and a manufacturing/investment destination.

But FDI itself does not automatically mean domestic value creation. The quality of investment, technology transfer, domestic sourcing, exports and employment are equally important.

India’s total exports of goods and services stood at approximately:

FY2013–14: US$466.2 billion

FY2024–25: US$824.9 billion

That represents an increase of roughly 77%.

Services exports rose from approximately US$152 billion to US$387.5 billion over the same period.

Merchandise exports rose from approximately US$314 billion to more than US$437 billion.

This produces an important conclusion:

India’s post-2014 export story is not only a manufacturing story. Services — particularly IT, business services, finance and digital services — remain a huge part of India’s international economic strength.

Manufacturing GVA increased substantially.

Official data show manufacturing GVA at constant prices increasing from approximately ₹15.6 lakh crore in 2013–14 to ₹28.25 lakh crore in 2023–24.

However, manufacturing’s share of total GVA moved only from approximately 17.2% to 17.5% during that period.

This is one of the most important statistics in this entire comparison.

In simple language:

India has produced substantially more manufactured output.

But manufacturing has not dramatically increased its overall share of the economy.

India remains a predominantly services-led economy.

That distinction is essential when evaluating Make in India.

Electronics is one of the clearest examples of a sector where the post-2014 model produced a dramatic expansion.

In FY2014–15:

Electronics production: approximately ₹1.9 lakh crore
Electronics exports: approximately ₹38,000 crore
Mobile-phone production: approximately ₹18,000 crore
Mobile manufacturing units: 2

By FY2024–25:

Electronics production: approximately ₹11.3 lakh crore
Electronics exports: approximately ₹3.27 lakh crore
Mobile-phone production: approximately ₹5.45 lakh crore
Mobile manufacturing units: approximately 300

Mobile-phone exports increased from around ₹1,500 crore to approximately ₹2 lakh crore.

The government reports that mobile-phone imports, which once accounted for around 75% of domestic demand, had fallen to approximately 0.02% by 2024–25.

Business significance

This is more than a product-level change.

India developed an ecosystem involving:

handset assembly
component suppliers
contract manufacturing
electronics clusters
logistics
exports
telecom equipment
semiconductor investment

The remaining question is the depth of domestic value addition and technology ownership.

Defence is another sector where the numbers show a major structural shift.

Defence exports rose from approximately:

₹686 crore in 2013–14

₹23,622 crore in 2024–25.

That represents roughly a 34-fold increase.

The government also reports substantial indigenisation through positive-indigenisation lists and increasing participation by domestic industry.

Defence production reached approximately ₹1.27 lakh crore in the data published for FY2023–24.

What changed?

The Indian defence industrial ecosystem increasingly includes:

missiles
artillery
aircraft
helicopters
naval platforms
radar
electronic systems
ammunition
protective equipment

The export base has also expanded.

However, India remains dependent on foreign technology and imports for several sophisticated defence systems.

Thus, the transformation is measurable but incomplete.

Pharmaceuticals should not be described as an industry created by the Modi government.

India already had a globally important pharmaceutical industry before 2014.

The post-2014 period is better understood as a period of continued expansion, diversification and policy-supported capacity building.

Pharmaceutical exports increased from approximately US$15.43 billion in FY2014–15 to US$27.85 billion in FY2023–24.

More recent Economic Survey data put pharmaceutical exports at approximately US$30.5 billion in FY2024–25, compared with just US$1.9 billion in FY2000–01.

India remains one of the world’s major suppliers of generic medicines and vaccines.

The next challenge is moving further into:

innovative drugs
biologics
advanced APIs
medical devices
biotechnology
high-value research

India already possessed a large automobile industry before 2014.

Therefore, the relevant comparison is not “industry versus no industry.”

The question is whether production, localisation and technological capability increased.

The answer is clearly yes in terms of scale.

The industry has expanded into:

passenger vehicles
commercial vehicles
two-wheelers
three-wheelers
electric vehicles
batteries
advanced components

PLI programmes have additionally targeted automobiles and auto components, particularly advanced automotive technology.

The emerging EV ecosystem means the sector is now simultaneously dealing with manufacturing, software, electronics, batteries and energy storage.

This is a fundamentally different industrial environment from the conventional automobile industry of the early 2000s.

Steel represents another area of major industrial expansion.

Crude-steel production increased from approximately 81.7 million tonnes in 2014–15 to around 170 million tonnes in 2025–26 according to government figures.

Installed crude-steel capacity reached approximately 200.3 million tonnes in FY2024–25.

This expansion is important because steel is a foundational input for:

infrastructure
automobiles
railways
defence
construction
machinery
renewable energy

The post-2014 period therefore saw a significant strengthening of India’s industrial materials base.

Engineering exports increased from approximately US$73.07 billion in FY2014–15 to US$109.30 billion in FY2023–24.

Engineering goods now account for approximately one-quarter of India’s merchandise exports.

This category includes:

machinery
electrical equipment
automotive components
industrial equipment
transport equipment
fabricated products
mechanical equipment

Engineering is particularly important because it represents a broad industrial ecosystem rather than a single product.

Solar manufacturing was relatively small in India before the current policy push.

Government data indicate that solar-module manufacturing capacity represented in the Approved List of Models and Manufacturers expanded from roughly 2.3 GW in 2014 to around 100 GW by August 2025.

Solar-cell capacity increased from less than approximately 1.2 GW in 2014 to around 25 GW by March 2025.

This is a major change.

But the next question is deeper:

Can India manufacture not only modules but also:

polysilicon → wafers → cells → modules → inverters → storage → machinery?

That will determine how much of the global clean-energy value chain India ultimately captures.

Business does not operate independently of infrastructure.

Government data comparing the pre- and post-2014 periods show:

National highways

Approximately 25,700 km were constructed during FY2005–FY2014.

During FY2015–FY2024, approximately 54,900 km were constructed.

Highway construction speed

The pace increased from approximately 12 km per day in 2013–14 to about 21.3 km per day in 2024–25 in the cited government comparison.

Metro rail

Cities with operational metro systems increased from approximately 5 in 2014 to 23 by January 2025.

Rail electrification

Broad-gauge electrified railway network increased from approximately 21,800 km in 2014 to 67,700 km in the cited comparison.

These developments have implications for logistics, commuting, industrial location and supply-chain efficiency.

Perhaps the most underappreciated difference between the two periods is the digital infrastructure surrounding business.

The pre-2014 economy already had a major IT industry.

But the post-2014 period saw the rapid emergence of:

Aadhaar-based digital identity
UPI
digital payments
GST technology
online government services
digital lending
fintech
e-commerce
digital public infrastructure

This changed how Indian businesses interact with customers, banks and government.

The result is particularly significant for MSMEs, startups and informal businesses moving toward formal digital transactions.

Government data show approximately:

2014: about 350 recognised startups

December 2024: approximately 157,706 recognised startups.

This does not mean all these companies became successful businesses.

But it does demonstrate a huge expansion in the institutional startup ecosystem.

The change has affected:

venture capital
fintech
e-commerce
SaaS
logistics
health technology
education technology
mobility
artificial intelligence

The startup ecosystem is therefore one of the clearest examples of how the Indian business environment has changed structurally.

Official government analysis estimates average inflation at approximately 8.2% during 2004–14 compared with approximately 5% during 2015–25.

This does not mean every year after 2014 experienced low inflation.

The post-2020 period included major food, fuel and commodity shocks.

But the average inflation environment became more moderate.

For businesses, lower and more predictable inflation can help with:

pricing
borrowing decisions
investment planning
wages
inventory management
consumer purchasing power

The introduction of formal inflation targeting by the RBI was an important institutional change in this period.

GST fundamentally changed the architecture of indirect taxation.

Before GST, businesses operated under multiple central and state indirect taxes and different tax structures.

After GST, India moved toward a nationwide indirect-tax framework.

The government reports that the average indirect tax rate declined from approximately 15% in the pre-GST system to around 11.6% for FY2024 in the cited comparison.

GST also created a much larger digital tax trail.

However, GST compliance has involved significant adaptation costs, particularly for smaller businesses.

Therefore, the impact should be viewed as:

greater tax-system integration + greater formalisation + substantial compliance transition.

The following list is not a ranking.

It identifies ten sectors where the available official data show particularly visible increases in production, exports, capacity, investment or industrial capability.

1. Electronics and mobile manufacturing

Electronics production rose roughly sixfold between FY2014–15 and FY2024–25, while mobile-phone production increased approximately 28-fold.

2. Defence

Defence exports rose roughly 34 times between FY2013–14 and FY2024–25.

3. Solar manufacturing

Module and cell manufacturing capacity expanded dramatically from the relatively small 2014 base.

4. Pharmaceuticals

Exports expanded strongly, while domestic manufacturing and PLI-supported investment increased.

5. Engineering

Engineering exports rose from approximately US$73 billion in FY2014–15 to US$109 billion in FY2023–24.

6. Steel

Crude-steel production approximately doubled between FY2014–15 and FY2025–26.

7. Automobiles and components

Production, localisation and investment have expanded alongside the transition toward EVs and advanced automotive technologies.

8. Rail manufacturing

Domestic production of coaches and railway equipment has expanded substantially.

9. Chemicals

The Economic Survey identifies chemicals as one of the manufacturing subsectors that increased its share of manufacturing GVA between FY2014 and FY2023.

10. Startups and digital business

Recognised startups increased from roughly 350 in 2014 to more than 157,000 by December 2024.

These are also not rankings and should not be interpreted as sectors that “failed.”

They are sectors where the data reveal weaker export-share performance, slower manufacturing growth or continuing structural constraints.

Textiles and apparel

The Economic Survey found that textile and apparel manufacturing’s share of GVA declined between FY2014 and FY2023.

Yet exports remain substantial and increased to approximately ₹3.25 lakh crore in FY2025–26.

The issue is therefore competitiveness and relative global share, not disappearance of the industry.

Leather

Leather and related products recorded a slight decline in manufacturing GVA share between FY2014 and FY2023.

Exports also remained below their earlier peak in the comparison reported by the Commerce Ministry.

Gems and jewellery

Exports declined from approximately US$41.27 billion in FY2014–15 to US$32.71 billion in FY2023–24, while its share of merchandise exports fell from 13.3% to 7.48%.

Food products

Food processing has enormous potential because of India’s agricultural base, but the Economic Survey shows its manufacturing GVA share declining between FY2014 and FY2023.

Man-made textiles

The sector faces strong international competition, particularly from countries with large-scale synthetic-fibre manufacturing and integrated export supply chains.

Labour-intensive apparel

India has not captured the same scale of global apparel manufacturing that some Asian competitors have achieved.

This is significant because apparel can create large numbers of jobs at relatively low capital intensity.

Capital goods and machine tools

India has expanded capital-goods production, but imports remain significant.

For example, machine-tool production increased from approximately ₹4,230 crore in 2014–15 to ₹14,286 crore in 2024–25, but imports remain substantial.

This illustrates the difference between producing machinery and becoming self-sufficient in advanced industrial equipment.

Traditional export commodities

Some traditional merchandise categories have lost global export share even when their absolute exports remain significant.

The Commerce Ministry’s data demonstrate this particularly clearly for gems and jewellery and several textile categories.

Petroleum-related manufacturing

The Economic Survey shows petroleum and coke/refined petroleum products experiencing a decline in their share of manufacturing GVA between FY2014 and FY2023.

The category is also highly affected by international crude prices, refining margins and trade composition.

Small-scale manufacturing

MSMEs have benefited from digitalisation, formalisation, credit schemes and government procurement, but many small manufacturers continue to face challenges involving:

scale
technology
finance
skilled labour
compliance
export standards
logistics
productivity

This remains one of India’s biggest unfinished industrial challenges.

Pre-Modi model

India’s earlier growth model was heavily characterised by:

services + domestic consumption + IT exports + established industrial groups + gradual liberalisation.

The UPA period also saw major expansion in infrastructure, telecom, IT services, pharmaceuticals, automobiles and other sectors.

Post-2014 model

The policy architecture increasingly added:

manufacturing + infrastructure + digital public infrastructure + strategic self-reliance + export manufacturing + production incentives + formalisation.

This does not mean one model replaced the other.

Instead:

India’s post-2014 economy has largely added a manufacturing and strategic-industrial layer to an economy that was already strongly driven by services.

Indicator	Pre-Modi reference	Modi-era reference	What the data indicate
Total exports	US$466.2bn, FY2013–14	US$824.9bn, FY2024–25	Large expansion
Merchandise exports	US$314bn	~US$437bn	Significant increase
Services exports	US$152bn	US$387.5bn	Very large increase
FDI	~US$308bn, FY2004–14	~US$667.4bn, FY2014–24	More than doubled
Manufacturing FDI	~US$97.7bn, FY2004–14	~US$165.1bn, FY2014–24	Substantial increase
Manufacturing GVA	₹15.6 lakh crore, FY2013–14	₹28.25 lakh crore, FY2023–24	Large increase
Manufacturing GVA share	17.2%	17.5%	Only modest change
Electronics production	₹1.9 lakh crore, FY2014–15	₹11.3 lakh crore, FY2024–25	~6×
Mobile production	₹18,000 crore	₹5.45 lakh crore	~28×
Defence exports	₹686 crore, FY2013–14	₹23,622 crore, FY2024–25	~34×
Recognised startups	~350, 2014	~157,706, Dec. 2024	Huge ecosystem expansion
Highway construction	25,700 km, FY05–14	54,900 km, FY15–24	More than 2×
Average inflation	~8.2%, 2004–14	~5%, 2015–25	Lower average

Sources: Government of India, PIB, RBI, Economic Survey, Commerce Ministry and other official datasets.

A serious economic analysis must also identify what the statistics cannot prove.

The data cannot prove that every improvement was caused by Narendra Modi.

Economic performance is influenced by:

previous governments
RBI policy
state governments
global economic cycles
commodity prices
technological change
demographics
private-sector investment
global supply-chain restructuring
COVID-19
geopolitical developments

Likewise, weak performance in a particular sector cannot automatically be attributed to a single government policy.

This is why sector-by-sector evidence is more useful than political slogans.

From the data, one particularly important structural change is visible:

India has become much more comfortable with the idea of manufacturing for the world.

The evidence is strongest in:

electronics + engineering + pharmaceuticals + defence + automobiles + solar + chemicals.

The country is increasingly attempting to move from:

large domestic market

large domestic market + manufacturing base + export platform.

That is a meaningful change in India’s economic strategy.

The central weakness is equally clear:

India’s manufacturing growth has not yet created the scale of labour-intensive employment that its population requires.

Electronics, automobiles, pharmaceuticals, chemicals and defence can create highly productive jobs, but many of them are relatively capital- and technology-intensive.

India still needs enormous expansion in:

apparel
footwear
leather
furniture
toys
food processing
light engineering
component manufacturing

These sectors can potentially connect millions of workers and small enterprises to formal supply chains.

The next decade should not be measured simply by asking:

“How much does India manufacture?”

A more meaningful question is:

How much of the global product’s value does India capture?

For example, manufacturing a smartphone is one step.

Manufacturing:

semiconductors + displays + cameras + batteries + chips + components + machinery + software + design + intellectual property

is a much deeper industrial achievement.

The same applies to:

electric vehicles
aircraft
solar equipment
defence systems
medical devices
industrial machinery

The evidence presents a more nuanced picture than either political celebration or political criticism.

The pre-Modi period

The 2004–14 decade delivered substantial economic growth, major poverty reduction, expansion of services, IT, pharmaceuticals, automobiles, infrastructure and private enterprise. Official data show particularly strong GDP growth in the first half of that decade.

But the latter years were characterised by slower growth, elevated inflation and weaker industrial momentum.

The Modi period

The 2014–25 period saw a stronger policy emphasis on:

manufacturing
infrastructure
formalisation
digitalisation
FDI
domestic production
strategic sectors
exports
startups
industrial incentives

The resulting data show particularly large changes in electronics, mobile phones, defence exports, infrastructure, FDI, startups and several manufacturing categories.

At the same time, manufacturing’s share of GVA has changed only modestly, while labour-intensive sectors such as textiles and apparel have not captured the same global-market expansion as some Asian competitors.

India did not start manufacturing in 2014 — but the manufacturing strategy changed after 2014.

This is perhaps the fairest conclusion that the statistics support.

The pre-Modi period established a strong foundation in:

services, IT, pharmaceuticals, automobiles, infrastructure, telecommunications and private enterprise.

The Modi period added a more explicit strategic emphasis on:

manufacturing, domestic value chains, digital infrastructure, public capital expenditure, defence production, electronics, strategic technology and export-oriented industrial policy.

The transformation is therefore sectoral rather than universal.

Some industries show extraordinary numerical expansion.

Others show modest progress or declining global share.

And the central challenge remains unchanged:

India must convert its enormous domestic market into globally competitive manufacturing ecosystems capable of generating technology, exports, productivity and mass employment simultaneously.

The first phase of this transformation has produced measurable results.

The next phase will determine whether India can move beyond “Made in India” toward “Designed, Engineered, Owned and Globally Sold from India.”

Author: Suman Munshi
IBG NEWS

Methodology & source note

This analysis uses publicly available official data from the Reserve Bank of India, Government of India/PIB, Ministry of Commerce & Industry, Economic Survey, MoSPI and related government publications. Comparisons are made using financial years wherever possible. Because statistical series and methodologies have changed over time, individual figures should not be interpreted as perfectly interchangeable across every period. The analysis also deliberately avoids claiming that observed economic changes were caused solely by the Prime Minister or a single government programme.

Key primary sources include the RBI’s historical macroeconomic indicators, the Economic Survey, Commerce Ministry export data and Government of India manufacturing/FDI datasets.

Source: ibgnews.com