One of the Narendra Modi-led government’s key initiatives, the ‘Make in India’ campaign, has generated an intense debate on the scope of manufacturing in the country. Sceptics of the ‘Make in India’ campaign argue that with growth slowing globally, it may not be possible for India to follow the standard Asian template of industrialization and export-fuelled growth to capture world markets. Optimists argue that given the size of its domestic market and its heavy dependence on imported goods, manufacturing in India still has scope to grow. As the first chart below shows, manufacturing as a share of India’s GDP is only a little below the average for lower middle income countries but is significantly below the average for upper middle income economies.