Reindustrialisation
Topic: Sectors of the Indian Economy · NCERT: Beyond NCERT
Meaning
Reindustrialisation is a policy-driven revival of factories: rebuilding manufacturing capacity and jobs after a phase of deindustrialisation or offshoring. Offshoring means firms moving their factories abroad. Governments use subsidies, incentives and trade policy to bring production back. For India, the aim is to lift manufacturing so that it can absorb surplus farm workers.
Example
The US passed the CHIPS Act and the Inflation Reduction Act in 2022 to bring chip and clean-energy manufacturing home. India's version includes the Production-Linked Incentive (PLI) schemes of 2020-21, which cover 14 sectors with about ₹1.97 lakh crore, and the India Semiconductor Mission (2021).
Don't confuse with
- Premature deindustrialisation: this is the problem, not the fix. It means manufacturing's shares of jobs and output peak and then fall at much lower income levels than in today's rich countries (Rodrik, 2016). Reindustrialisation is the policy response to it.