Monday, 17 August 2026
As governments around the world seek to strengthen economic resilience while lowering emissions, industrial policy has returned to the centre of long-term planning. Europe has spent the past several years reshaping its manufacturing landscape through a combination of regulatory reforms, investment support and supply chain initiatives designed to accelerate the production of low-carbon technologies. While India’s economic priorities differ, Europe’s experience offers several practical lessons as the country expands its own clean manufacturing ambitions.
The European Union’s industrial transformation has evolved beyond climate objectives alone. Policymakers increasingly view domestic manufacturing capacity as essential for economic competitiveness, energy security and reducing dependence on imported technologies and critical raw materials. This broader strategy has been reinforced through legislation aimed at accelerating investment in strategic industries, streamlining project approvals and encouraging greater production of technologies such as batteries, solar equipment, wind components, electrolysers and carbon capture systems.
The approach reflects a growing recognition that reducing emissions requires more than ambitious environmental targets. It also depends on creating the conditions that allow manufacturers to invest with confidence while ensuring that supporting infrastructure, skilled labour and financing are available.
India is pursuing many of the same objectives through programmes supporting renewable energy manufacturing, battery production, electric mobility and green hydrogen. The country’s industrial base, expanding domestic market and relatively young workforce provide opportunities to develop competitive supply chains in sectors expected to experience significant global growth over the coming decades.
One of the strongest lessons from Europe is the importance of policy stability. Large industrial projects often require substantial capital and may take years before becoming operational. Investors therefore place considerable value on predictable approval processes, transparent regulations and long-term policy consistency. Delays involving environmental permits, land acquisition, electricity connections or transport infrastructure can increase costs and discourage investment.
Creating a more coordinated approval system could help India accelerate industrial development while maintaining environmental standards. Greater alignment between central and state authorities would also improve certainty for manufacturers planning large-scale facilities.
Europe’s experience also highlights the importance of creating demand alongside expanding manufacturing capacity. Building factories alone does not guarantee commercial success if markets for cleaner products remain limited or uncertain. Public procurement, product standards and certification frameworks can help encourage early adoption of lower-emission materials and technologies while allowing industries to scale production.
India has already introduced standards for classifying lower-emission steel and continues to expand policies supporting clean energy technologies. Similar approaches could encourage wider adoption of sustainable construction materials, electric public transport, energy storage systems and other products that contribute to industrial decarbonisation.
Infrastructure remains another critical factor. Manufacturing clusters require reliable electricity, transport links, ports, water supplies and digital connectivity. Emerging industries such as green hydrogen add further requirements, including renewable power generation, electrolysers, storage facilities and distribution networks capable of supporting industrial users.
Coordinated investment across these areas can reduce operating costs and improve competitiveness by allowing multiple companies to benefit from shared infrastructure rather than developing separate facilities.
Developing a skilled workforce represents another long-term challenge. As manufacturing technologies become more advanced, employers require technicians, engineers and specialists capable of operating increasingly sophisticated production systems. Expanding technical education, vocational training and industry partnerships can help ensure that workforce development keeps pace with industrial investment.
Innovation also plays an important role. Continued collaboration between universities, research institutions and manufacturers can accelerate the commercialisation of new technologies while strengthening domestic expertise in strategic industries.
Although Europe’s policy framework cannot be directly replicated, its experience demonstrates that industrial transformation depends on far more than financial incentives alone. Regulatory efficiency, infrastructure planning, workforce development, research capabilities and market creation all contribute to building a competitive manufacturing sector.
For India, the challenge is to integrate these elements into a coherent long-term strategy that supports economic expansion while reducing industrial emissions. Success will depend not only on attracting investment but also on creating an environment where businesses can scale production, innovate and compete internationally. As global demand for clean technologies continues to increase, countries that successfully align industrial policy with economic development are likely to strengthen both their manufacturing base and their position within future supply chains.
Source: © CIJ.World India Research & Analysis Team
