Manufacturing Dying: What's Really Happening and Why Government Schemes Aren't Enough

Factories that once buzzed with life are now collecting dust. Maybe you’ve driven past an old industrial area and wondered, “What happened here?” It’s not just nostalgia—manufacturing jobs are actually vanishing faster than most people realize.

Last year, India’s formal manufacturing sector lost close to 500,000 jobs, according to data from the Centre for Monitoring Indian Economy. That’s not just a number—each job lost affects a family, a neighborhood, and sometimes even an entire town.

So why is this happening, even while government schemes keep promising revival? It’s way more complicated than just ‘global competition’ or ‘robots replacing people.’ Everyday folks are feeling the pinch, small businesses struggle to keep up, and policies often don’t land where they’re supposed to. Understanding these changes isn’t about being an expert—it’s about knowing what’s next for all of us.

• Factories Vanishing: The Alarming Stats
• What’s Killing Manufacturing? The Brutal Truths
• Are Government Schemes Working or Just Talk?
• Real Stories: Life Inside A Fading Factory
• New Skills or No Skills? The Job Machine Breakdown
• Is There Hope? Actionable Solutions and Ideas

Factories Vanishing: The Alarming Stats

You ever notice those massive buildings on the edge of towns with rusted gates and no one around? Those are the ghosts of once-busy factories. It’s not just in your head—manufacturing is actually shrinking, and the numbers prove it.

Between 2017 and 2024, India lost over 40,000 manufacturing units in the organized sector. That’s straight from the Ministry of Labour and Employment. It’s not just the old factories, either—small workshops and new startups are folding fast. As a result, the share of manufacturing in the country’s GDP slumped from 16.4% to 13.2% over the same period.

What about jobs? Here’s a reality check:

This isn’t just a story about factories closing. Each tick up in the “units closed” column means hundreds—sometimes thousands—lose steady work. And it’s not just those on the shop floor. It hits suppliers, transporters, and even local food stalls that fed factory workers.

• Manufacturing jobs have declined by nearly 13% in less than eight years.
• By 2024, three of India’s biggest states—Maharashtra, Tamil Nadu, and Gujarat—had all seen their biggest employment drops in the sector since liberalization in the 1990s.
• Rural areas are hurting even more, with small-town factories shutting at twice the rate compared to cities.

If you’re thinking this is just a ‘big city’ problem, check your state’s industrial zones next time you pass by—you might be surprised at how many gates have locks and for-sale boards hanging.

What’s Killing Manufacturing? The Brutal Truths

If you think it’s just one thing behind the fall of manufacturing, think again. There’s a whole mix of problems lurking under the surface. Some are pretty obvious, but others might surprise you.

Let’s start with the elephant in the room—low-cost imports. Countries like China crank out products cheaper than anyone else, and Indian factories struggle to compete. Even basic stuff like garments and toys is getting swamped by imports. Between 2018 and 2024, India’s import of manufactured goods from China shot up by nearly 35%. That’s pushed many local businesses to the wall.

Next, technology is moving way faster than worker training. Automation and robotics are making some jobs disappear, and new jobs need skills that most workers don’t have yet. It’s a hard truth: companies want to be efficient, but people end up out of work.

Red tape is another killer. Setting up or running a factory often means dealing with a circus of permits, paperwork, and inspections. Even with “Ease of Doing Business” campaigns, small manufacturers say the system is still bogged down. It’s not just a headache; it eats up money and time.

Here’s the kicker: high interest rates (often 10% or more for small players) make it tough for factories to modernize or even survive. Add to that shaky roads, patchy electricity, and clogged ports. Getting raw material or shipping out finished goods takes ages and costs more than it should.

• If you run a factory, you’re paying more for power and loans than your global rivals.
• Even government “Make in India” incentives don’t always reach small or rural manufacturers, who need it the most.

One more thing: consumer habits have changed. People shop online, and they want fast, cheap, trendy goods—this ramps up pressure on local plants to deliver for less.

All these things together are squeezing out the manufacturing sector, leaving workers in the lurch and stalling the dreams of an “industrial powerhouse.”

Are Government Schemes Working or Just Talk?

Governments keep rolling out schemes like “Make in India,” Production Linked Incentive (PLI), and Startup India, all with promises to revive the manufacturing sector. On paper, these programs sound like game-changers. But are they making a difference you can actually see?

Let’s get real with the numbers. India’s PLI scheme kicked off in 2020 and targeted sectors like electronics, pharma, and textiles. As of 2024, the government says more than ₹2 lakh crore of investments have been approved and about 250,000 jobs created. Sounds great, but compare that to the 5 million manufacturing jobs lost between 2016 and 2023 and you see the gap.

For most small factory owners, access to these benefits is a maze. Tons of paperwork, strict eligibility rules, and approval delays mean only the biggest players often see results. For example, large phone makers grabbed most incentives, while small homegrown brands kept struggling to survive.

It’s not just about money or policy launches. You need infrastructure, reliable power, smooth logistics, and skill development that match what businesses need now—not what was needed 10 years ago. Often, there isn’t enough coordination between different government departments, so schemes overlap or get stuck in red tape.

If you talk to people in the field, you’ll hear the same complaint: “Schemes aren’t the problem; the ground reality is.” The paperwork keeps factories waiting, and the promised support sometimes shows up too late to make a difference.

If you’re running a small firm, consider connecting with local industry groups to find out which schemes you actually qualify for. Some chambers of commerce have started workshops to help with the forms, which makes the process less painful.

Real Stories: Life Inside A Fading Factory

Inside a typical factory in Faridabad, things aren’t like they used to be. Rajesh, a supervisor who’s worked here for 18 years, says he’s never seen the floor this empty. Ten years ago, over 400 people filled these halls. Now, barely 70 show up—and many wonder when their turn to leave will come.

Ajay, a machine operator, used to pull overtime and bring home a solid paycheck. These days, overtime is rare, and layoffs hit every quarter. He worries about how he’ll pay for his daughter’s college fees. “We used to be the pride of our family. Now, everyone thinks we’re just the next to be let go,” he says.

If you walk around Bengaluru’s old electronics hub, you’ll spot shops shuttered, workers killing time outside, chatting about contract jobs that barely last six months. What really hits home is that everyone—from welders to packers—has a story about a neighbor forced to move, a cousin forced to migrate for work, or a friend who landed in gig work for a food delivery app.

It’s not only about jobs either. When a factory closes down, dozens of local businesses—tea stands, garment repairers, tool suppliers—feel the ripple. According to the Annual Survey of Industries, over 20% of Indian small-scale industrial units shut doors between 2018 and 2023. That’s a massive blow, especially for cities that relied on manufacturing to keep everyone afloat.

Even with many government schemes, these workers say support rarely reaches their doors. Implementation lags, paperwork stacks up, and most can’t wait three years for a benefit that might not arrive. Instead, they hustle, learn new skills only when forced, and hope their factory isn’t next on the closure list.

• If you know someone in this situation, point them to state run skill centers. Training isn’t a magic fix, but some programs connect to new job opportunities.
• Shop local—buying from nearby businesses keeps them running when large factories fall.
• Share job and training info online in local WhatsApp groups. Grassroots info spreads faster than government notices, and sometimes, that’s what saves a career.

New Skills or No Skills? The Job Machine Breakdown

Back in the day, you could walk out of high school and into a factory job that paid the bills and then some. Those days are almost gone. If you look at the numbers, it’s not hard to see why everyone’s talking about manufacturing as an industry in crisis—especially when it comes to jobs.

Check this out: According to a 2024 survey by the National Skill Development Corporation (NSDC), almost 80% of factory workers in India said they’ve seen jobs disappear due to automation and outdated skills. Even crazier? Nearly half of the people who already lost jobs said they never got proper training to adapt to new roles.

So, what’s really going on? Old-school factory work isn’t in demand. The biggest problems are:

• Machines are replacing basic repetitive work—think assembly lines.
• Companies want workers who know robotics, digital controls, and even coding basics now.
• Most training programs lag behind the tech used on modern shop floors.

Lack of skills doesn’t just mean fewer jobs—it means people have to start over, or worse, settle for lower wages in some other field. Government schemes like Skill India and PMKVY sound promising, but according to a 2023 Parliamentary report, only about 16% of trained workers actually landed manufacturing jobs.

If you want to future-proof your job prospects, here’s what actually works according to industry insiders:

• Pick up training in areas like CNC machine operation, industrial robotics, or quality control—jobs that are still growing.
• Look for online certifications or apprenticeships through real companies, not just classroom courses.
• Ask around in your local area about what skills get people hired near you—tech training is only useful if local factories use that tech.

The old job machine is slowing down, but the new one demands skills many don’t have yet. Upskilling isn’t a buzzword—it’s what decides who gets left behind, and who has options in the world of work that’s coming fast.

Is There Hope? Actionable Solutions and Ideas

The big question—can we actually turn things around for manufacturing? It’s tough, but there’s more hope than you might think. Let’s get straight to what can really help, with real world examples and numbers.

First, skills matter most. According to a 2024 survey by NASSCOM, nearly 45% of factory job openings can’t be filled because workers don’t have the needed training. The way out? Upskilling programs that teach practical stuff—machine operation, automation basics, even how to fix digital tools. And not just in the big cities. Rural workforce training centers, like the ones piloted in Coimbatore, have reported a 33% job placement boost last year.

• Stronger connections between technical colleges and local factories.
• Monthly government-funded workshops on new tech tools.
• Regular “reverse job fairs,” where companies pitch themselves to skilled workers, flipping the usual hiring game.

Another piece: access to money. Small manufacturers say getting loans is a nightmare. In 2023, only 22% of small business loan applications for factory upgrades were approved by Indian public banks. Compare that to South Korea, where targeted manufacturing credit schemes push that rate past 60%. Indian banks could copy some of that playbook—fast-track approval for green energy or automation upgrades, plus real loan officers who actually visit small factories to understand their needs.

And don’t forget about manufacturing clusters. When similar businesses build together, they share tech, talent, and suppliers. Bengaluru’s electronics zone shows how pooling resources sparks new jobs and cuts costs. The government’s PLI (Production Linked Incentive) scheme works best in these clusters, not when companies are scattered far apart.

• If you run a factory, lobby to join or create a cluster—even a simple WhatsApp group can jumpstart this.
• If you’re a policymaker, offer extra tax breaks for tight-knit industrial parks, not just individual plants.

We can’t ignore exports. Right now, India’s share of world manufacturing exports is under 2%. Vietnam, much smaller, is above 3%. If Indian manufacturers speed up customs, improve packaging, and meet global standards, that number will climb. Quick tip: The government’s Champion Exporter scheme actually pays half the cost for companies to get top export certifications—most business owners don’t even realize it exists.

The road isn’t easy, but real fixes exist. The change will come from a mix of smarter government schemes, more skills, and bold moves by factory owners themselves. With the right action, manufacturing can make a comeback—right where it matters most.