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EP 63 | The Hidden Side of Manufacturing: Inside India’s Strategy of Multi-Plants
India’s manufacturing sector, despite liberalization and decades of economic reforms, continues to underperform relative to its potential.
A recent study, “Multiplying Multi-Plants: A New and Consequential Phenomenon” by Arvind Subramanian, Abhishek Anand, and Dr Naveen Joseph Thomas, sheds light on a critical yet overlooked factor influencing this stagnation—the rise of multi-plants.
These are multiple small production facilities established by firms within a state, rather than expanding existing plants. Contrary to previous assumptions, large plants in India have not scaled up; instead, they remain fragmented and small by international standards. This has profound implications for productivity, competitiveness, and policy.
KEY DISCUSSION POINTS
- What exactly are “multi-plants,” and why have they become so prevalent in India’s manufacturing sector?
- How has the aggregation of multi-plant data led to the misinterpretation of plant size distribution in India, and what are its implications for policy and economic research?
- Why are multi-plant firms less productive compared to single-plant firms of similar size, and to what extent has this affected India’s global manufacturing competitiveness, especially compared to countries like Bangladesh?
- How do labour regulations and political risks influence the proliferation of multi-plants? Is the use of multi-plants a substitute for contract labour, or do they complement each other in different contexts?
- What policy reforms could encourage firms to scale up plants rather than proliferate smaller ones?
- How can India create an industrial environment that balances labour protections with growth incentives?
Speakers:
Dr Naveen Joseph Thomas, Vice Dean, Jindal School of Government and Public Policy (JSGP), O. P. Jindal Global University, Haryana
Abhishek Anand, Managing Director, Insignia Policy Research, Kerala
Moderator:
Banisha Begum Shaikh, Senior Associate (Research & Projects), Centre for Public Policy Research (CPPR), Kerala
Tune in for an insightful conversation about why firms prefer the multi-plant approach, how it affects jobs and exports, and what changes in policy might help India build stronger and larger manufacturing units in the future.
View all episodes
By Centre for Public Policy ResearchIndia’s manufacturing sector, despite liberalization and decades of economic reforms, continues to underperform relative to its potential.
A recent study, “Multiplying Multi-Plants: A New and Consequential Phenomenon” by Arvind Subramanian, Abhishek Anand, and Dr Naveen Joseph Thomas, sheds light on a critical yet overlooked factor influencing this stagnation—the rise of multi-plants.
These are multiple small production facilities established by firms within a state, rather than expanding existing plants. Contrary to previous assumptions, large plants in India have not scaled up; instead, they remain fragmented and small by international standards. This has profound implications for productivity, competitiveness, and policy.
KEY DISCUSSION POINTS
- What exactly are “multi-plants,” and why have they become so prevalent in India’s manufacturing sector?
- How has the aggregation of multi-plant data led to the misinterpretation of plant size distribution in India, and what are its implications for policy and economic research?
- Why are multi-plant firms less productive compared to single-plant firms of similar size, and to what extent has this affected India’s global manufacturing competitiveness, especially compared to countries like Bangladesh?
- How do labour regulations and political risks influence the proliferation of multi-plants? Is the use of multi-plants a substitute for contract labour, or do they complement each other in different contexts?
- What policy reforms could encourage firms to scale up plants rather than proliferate smaller ones?
- How can India create an industrial environment that balances labour protections with growth incentives?
Speakers:
Dr Naveen Joseph Thomas, Vice Dean, Jindal School of Government and Public Policy (JSGP), O. P. Jindal Global University, Haryana
Abhishek Anand, Managing Director, Insignia Policy Research, Kerala
Moderator:
Banisha Begum Shaikh, Senior Associate (Research & Projects), Centre for Public Policy Research (CPPR), Kerala
Tune in for an insightful conversation about why firms prefer the multi-plant approach, how it affects jobs and exports, and what changes in policy might help India build stronger and larger manufacturing units in the future.