India’s premature deindustrialization and Falling investment rate in the 2010s

R Nagaraj

World Development, 2025, vol. 191, issue C

Abstract: India’s GDP growth rate faltered in the 2010s after steadily accelerating for decades since the early 1980s. The slowdown adversely affected employment growth, poverty reduction, and nutritional status. Why did it happen? As the study demonstrates, the answer is India’s premature deindustrialization and rising import dependence on China. Capital and intermediate goods industries got hollowed out, with the manufacturing GDP share stagnating at around 15-17 percent since 1991; annual industrial growth rates have declined steeply since 2015-16, even ignoring the Pandemic years. Manufacturing employment share has declined; agriculture’s share rose in the 2010s—an unmistakable sign of premature deindustrialization.

Keywords: India; Economic growth; Premature deindustrialization; Industrial policy; Capital formation; Dependent development; Make in India (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:wdevel:v:191:y:2025:i:c:s0305750x25000397

DOI: 10.1016/j.worlddev.2025.106954

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