Sunrise industry

Topic: Industrial Policy, Public Sector, MSMEs and Disinvestment · NCERT: Beyond NCERT

Meaning

A sunrise industry is a new sector that is growing fast and is expected to become large and important in the future. It usually grows from new technology or from a new need in society, such as clean energy. Like the sun at dawn, it is only starting to rise.

Why it matters: these industries bring future jobs, exports and technology. Governments pick them for special support so the country does not have to depend on imports later.

Explanation

What makes an industry "sunrise"

• It is new. The industry is young, or it is new in that country.
• It grows fast. Its output and demand grow much faster than the rest of the economy.
• It is built on technology. Most sunrise industries depend on science and R&D (research and development, meaning spending on new knowledge and products).
• It is risky at the start. Costs are high, profits come late, and many firms fail before the market becomes mature.
• It is strategic. It is often linked to national goals such as energy security, climate action, defence or digital power.
• The word describes an industry (a whole sector), not a single company.

Sunrise industries in India today

• Semiconductors: chip design and fabrication (making the chips).
• Green hydrogen: hydrogen made using renewable electricity.
• EV and ACC batteries: batteries for electric vehicles and Advanced Chemistry Cell (ACC) batteries.
• Drones.
• Space: private firms could enter after IN-SPACe (2020).
• AI: supported by the IndiaAI Mission (2024).
• The RDI scheme calls these "strategic and sunrise domains". It lists energy security, climate action, quantum, AI, biotech and the digital economy [3].

What makes them rise or fall

• Rise: strong R&D. New industries need new knowledge.
• R&D intensity = (GERD ÷ GDP) × 100. GERD (Gross Expenditure on Research and Development) is the total R&D spending in a country.
• Worked example: GDP = Rs 300 lakh crore and GERD = Rs 1.92 lakh crore.
  • R&D intensity = 1.92 ÷ 300 × 100 = 0.64%.
  • To reach 2% of the same GDP, GERD would need to be Rs 6 lakh crore, about 3 times higher.

• Low R&D means fewer home-grown sunrise firms.

• Rise: patient capital. This means money from investors who will wait many years for a return.

• Deep-tech firms take many years before they earn revenue.

• Normal venture capital (VC) funds want to sell their stake and exit sooner. So public funds step in to attract private money.

• Rise: policy support. Governments help through missions, tax breaks, funds and opening sectors to private firms, as happened with space.

• Fall: failure to scale. If costs do not come down, or demand does not grow as expected, the industry stays small or depends on imports.
• Over time, a sunrise industry becomes mature. Later it may become a sunset industry when newer technology replaces it.

Sunrise vs sunset, and just transition

• Sunset industries are mature or declining sectors, such as film cameras, landlines and coal-based power.
• When a sunset industry closes, its workers and regions need help to move to new work. This is called a just transition.

• Examples of help: retraining, new local industries and social security.

• So the growth of sunrise industries like green hydrogen is directly linked to the decline of sunset industries like coal.

In India

• Who supports them:
• National Green Hydrogen Mission (2023): target of 5 MMT (million metric tonnes) a year by 2030.
• IN-SPACe (2020): the Indian National Space Promotion and Authorisation Centre. It authorises private space activity.
• IndiaAI Mission (2024): supports artificial intelligence.

• SAMARTH Udyog Bharat 4.0 (Ministry of Heavy Industries): helps manufacturers adopt Industry 4.0, meaning smart factories that use IoT, AI, robotics, big data and cloud computing.

• Funding for the R&D behind sunrise sectors:

• Anusandhan National Research Foundation (ANRF): set up under the ANRF Act, 2023, which came into force on 5 February 2024 [2]. Its Governing Board is chaired by the Prime Minister [3].

• Research Development and Innovation (RDI) Scheme: Rs 1 lakh crore over 6 years, with Rs 20,000 crore for 2025-26 [3].

  • It gives long-term loans or refinance at low or nil interest to private-sector R&D. It does not simply give grants [3].
  • The Prime Minister launched the RDI Fund on 3 November 2025 [4].

• Support for firms in these sectors:

• The DPIIT Deep Tech Startup category allows an age of up to 20 years and turnover up to Rs 300 crore, because such firms have long gestation periods (they take many years to earn revenue) [1].

• Startup India Fund of Funds 2.0 has a Rs 10,000 crore corpus (total money set aside) to bring in more venture capital [5].

• The main weakness: India's GERD is about 0.64% of GDP. The private sector pays only about 35-36% of it, against over 70% in leading innovative economies [2].

Don't confuse with

• Sunset industry: a mature or declining sector, such as coal-based power or landlines. A sunrise industry is new and growing.
• Startup / Deep-tech startup: these are single firms. A sunrise industry is a whole sector. A deep-tech startup may belong to a sunrise industry, but the two terms are not the same.
• Infant industry (argument): a trade-policy idea. A new home industry is given temporary protection, such as tariffs, until it can compete. It is about protecting a young industry. "Sunrise" only describes the industry's growth outlook.
• Industry 4.0: a way of producing goods (smart factories with cyber-physical systems, IoT and AI). It is not a sector. Even an old industry can adopt Industry 4.0.

Prelims Hooks

• Sunrise industry = a new, fast-growing sector with high future potential. Sunset industry = a mature or declining sector (e.g. coal-based power, landlines, film cameras).
• The RDI scheme calls its target areas "strategic and sunrise domains". They include energy security, climate action, quantum, AI, biotech and the digital economy [3].
• National Green Hydrogen Mission (2023) target: 5 MMT a year by 2030.
• IN-SPACe (2020) opened space to private firms. IndiaAI Mission was launched in 2024.
• Trap: the RDI scheme (Rs 1 lakh crore over 6 years) gives low or nil-interest long-term finance, not grants. Its direction comes from the ANRF Governing Board, chaired by the PM [3].
• DPIIT Deep Tech Startup category: age up to 20 years, turnover up to Rs 300 crore [1].

Mains Points

• Strategic autonomy vs cost:
• Supporting semiconductors, green hydrogen and EV batteries serves the goals of Atmanirbhar Bharat and net zero by 2070.
• But these sectors need huge, patient capital, while VCs usually want an exit in 5-7 years.

• So public money (Fund of Funds, RDI Fund, Deep Tech category) should draw in private money, not replace it [1][3].

• The R&D gap limits India's sunrise sectors:

• GERD is only about 0.64% of GDP, and the private share is about 35-36% [2].
• So most Indian startups are consumer or service apps, not frontier technology.

• ANRF and the RDI Fund try to fix this [3]. Success depends on actually spending the funds and linking universities with industry.

• Sunrise must be paired with just transition:

• As coal (a sunset industry) declines, districts in Jharkhand, Odisha and Chhattisgarh lose jobs and income.
• Policy must combine support for frontier industries with reskilling and new local industries. Industry 5.0's human-centric approach, where humans and machines work together, supports this.

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