India’s economic story is often told as one of rapid growth and global ambition. Yet beneath the headlines lies a paradox: a fast-growing economy that still struggles to establish itself as a decisive manufacturing power. Fragile foundations, modest industrial employment, and persistent gendered inequalities complicate the narrative of progress.
It is precisely this paradox that frames Padmini Swaminathan’s India’s Industrial Policy: A Reassessment — Growth, Employment, and Gender Justice in Tamil Nadu. The book does not directly address the latest incentive schemes or investment cycles; many of its chapters were written at different times, responding to specific policy debates of their day—on industrial structure, labour institutions, education, and gender, often over a decade or more ago. Yet, read together, they form a coherent and unsettling reassessment, suggesting that industrial policy cannot be evaluated solely by output growth. It must also be judged by the nature of employment it creates, the institutional foundations of productive work, and the gendered structures that underpin industrialization.
The need to revise perspectives is especially evident in the entrepreneurial responses to recent policy efforts, spanning over a decade now, aimed at making manufacturing the engine of structural change. Most visibly, the generously designed Production Linked Incentive (PLI) schemes—spanning sectors from electronics to pharmaceuticals to textiles—have not elicited private investment at the scale, technological depth, or employment intensity anticipated by most observers. Firm behaviour remains cautious: integration into higher tiers of global value chains is limited, domestic value addition is uneven, and production strategies often favour subcontracting and labour flexibility over sustained technological deepening. These hesitations appear less cyclical than structural, pointing to constraints embedded in labour markets, skill formation systems, firm strategies, and the gendered foundations of work. Swaminathan’s evaluative lens helps explain why incentive-driven strategies continue to fall short and why discussions of industrial policy must return to centre stage—particularly now, when we live in a fractured global order where weaponized supply chains make economic security a pressing priority.
Swaminathan, former Director of the Madras Institute of Development Studies (MIDS) and later Professor and Chairperson of the Centre for Livelihoods at the Tata Institute of Social Sciences, Hyderabad, has long been recognized as a thoughtful voice on labour, gender, and industrialization. Her career spans research on industrial organization, labour markets, occupational health, and skill development. This collection, specially commissioned for MIDS’s Golden Jubilee, consists of thirteen essays arranged in four broad sections: colonial Tamil Nadu’s industrial beginnings; post-Independence industrialization; the nexus of growth, employment, and education; and the role of gender in economic development. It can be read both as a retrospective on Tamil Nadu, long considered one of the better-performing industrial States, and as a provocation for contemporary debate on India’s overall approach to manufacturing.
The first part reminds us that India’s attitudes and administrative reflexes towards industrial policy did not begin with Independence or liberalization. Swaminathan traces how provincial governments in the Madras Presidency attempted to shape industrial outcomes despite imperial constraints, showing how provincial priorities often clashed with imperial ones and how questions of infrastructure, regulation, and education were already being deployed to influence industrialization. This historical arc undermines the assumption that industrial policy is a recent invention, highlighting the path-dependent nature of industrialization: choices made under colonial rule continue to shape Tamil Nadu’s trajectory long after Independence.
The second part illustrates how state interventions evolved in the decades after 1947. Swaminathan’s essays are attentive to specific sectors and policies, showing both achievements and limitations. She examines how Tamil Nadu’s industrial clusters in textiles, automobiles, and leather developed, and how state policy interacted with firm strategies. These case studies complicate the ‘model state’ narrative by revealing the social costs and institutional weaknesses that coexist with industrial success. For example, while Tamil Nadu became a hub for automobile manufacturing, the employment generated was often insecure, segmented, and gendered. For readers outside Tamil Nadu, the lesson is clear: replicating the state’s strategy without addressing its labour and gender outcomes risks reproducing the same problems nationally. Industrialization is not a smooth process of growth but a contested terrain shaped by politics, institutions, and social relations.
The third part, on industrial growth, employment, and education, is perhaps the most directly relevant to today’s policy dilemmas. Swaminathan insists that labour is not a residual variable but central to industrialization. Secure employment pathways, social protection, and skill formation are not luxuries; they are the foundations of a productive industrial economy. She challenges the mainstream narrative that treats labour mainly as a cost, arguing that the real problem is not rigidity but weakness: insecure jobs, thin social protection, and poor training systems. When workers lack stability, they have little incentive to invest in skills. When firms rely on high attrition, they avoid training. The result is a trap of low productivity and limited upgrading.
Swaminathan’s critique of education and skill formation is especially relevant. While there has always been talk about ‘skilling’, technical education remains uneven, vocational training fragmented, and industrial skill pathways undervalued. Tamil Nadu, despite relatively better indicators, still struggles with linking education to industrial upgrading. The lesson is sobering: if even Tamil Nadu faces gaps, what would be happening elsewhere? Centrally designed incentive schemes cannot by themselves transform manufacturing outcomes nationwide. Industrial policy must treat skill formation as infrastructure, not as an afterthought. Swaminathan’s essays here are particularly valuable because they connect the dots between education policy, labour markets, and industrial outcomes—a linkage often missing from mainstream debates.
The fourth part on economic development and why gender matters is the most distinctive. Swaminathan shows that industrial labour markets are deeply gendered: women are concentrated in insecure, undervalued work, while their unpaid care labour subsidizes the system. India has not built the supports—childcare, safe transport, predictable hours, maternity protections—that enable women to participate in industrial work at scale. Without these, half the potential workforce remains constrained, and firms face instability. Gender justice here is not just an ethical concern but an economic one. Industrialization that sidelines women cannot deliver mass employment or sustained capability building. Her essays integrate gender into the core of industrial policy analysis, forcing readers to confront the social foundations of production. She also draws attention to how women’s labour force participation is shaped not only by workplace conditions but also by household dynamics and social norms, reminding us that industrial policy must engage with the broader social organization of work.
Across all four parts, a recurring theme is the ‘low investment equilibrium’ of Indian manufacturing. Firms often avoid scale and long-term commitments, preferring fragmented production, outsourcing, and contract labour. These strategies minimize risk but also depress productivity and limit job creation. PLI schemes assume that lowering costs and raising returns will induce firms to invest and expand. Swaminathan cautions that if the institutional terrain remains weak, firms will expand output without changing employment practices or investing in skills. The result is more production, but not necessarily more secure jobs or stronger capabilities. Competitiveness achieved through informality and insecurity may deliver output, but not the social foundations of a mature manufacturing economy. Her essays, therefore, help us see why incentives alone cannot resolve India’s manufacturing dilemma, and challenge the idea that industrial policy is simply about designing the right incentive scheme. By foregrounding labour and gender, she shows that industrialization is inseparable from social organization. This is a valuable corrective to the tendency of treating industrial policy as a purely technical matter of subsidies and tariffs.
Since the book is a collection of studies commissioned at different points in time, it can feel expansive, lacking a single, tightly linear narrative, offering no detailed alternative blueprint. This needs to be accepted as a conscious choice: the book is about reassessment, not ready-made solutions. Its richness lies in showing that industrialization is multi-dimensional—about institutions, labour, gender, and history—not just about factories and subsidies. The book is meant to provoke debate, not to close it, offering a diagnosis for policymakers wrestling with why private investment remains cautious despite PLI.
India’s problem is not just insufficient incentives but weak institutions. The real constraints are labour markets that fail to produce stable workers, education systems that don’t reliably equip people with skills, gendered social arrangements that restrict participation, and firm strategies that avoid long-term commitments. The warning is clear: if success is judged only by output growth or export numbers, policy may look good on paper but not deliver over the long term. A mature industrial economy must be judged by whether it creates productive, dignified, and inclusive work.
For Tamil Nadu, the book complicates the ‘model state’ narrative, suggesting we replace the oft-used ‘copy Tamil Nadu’ narrative with a ‘learn from Tamil Nadu’s successes and failures alike’ narrative, as it also reveals that social costs and institutional weaknesses coexist with industrial success. Replicating Tamil Nadu’s strategy without addressing these outcomes risks reproducing the same problems nationally. The lesson is that the State becomes both a model and a cautionary tale, and Swaminathan’s essays help us see both sides clearly.
Ultimately, India’s Industrial Policy: A Reassessment is more than a collection of thirteen, somewhat dated, essays. It is a framework for rethinking industrialization in India. By foregrounding labour, skills, and gender, Swaminathan forces us to confront the deeper social organization of production. Her message is simple but powerful: subsidies alone cannot build industries. Industrialization requires institutions that make long-horizon investment attractive—secure jobs, strong skill systems, and inclusive labour markets. Without these, India’s manufacturing challenge will remain unresolved. In an era when manufacturing success is finally being re-evaluated from the longer-term perspective of national security, this book is a necessary reminder that factories and incentives are only part of the story. The real foundations of industrialization lie in people, institutions, and justice.
TCA Ranganathan, former Chairman & Managing Director, EXIM Bank of India, is the co-author of All the Wrong Turns: Perspectives on the Indian Economy (Tranquebar, 2019).