NOTE4STUDENTS:
India aims to lead in sunrise sectors to achieve a $32 trillion economy. UPSC often asks questions on economic growth, industrial policy, and technological advancements, linking them to government initiatives and global trends. Many aspirants struggle with integrating current affairs into economic frameworks, making their answers generic. This article simplifies the role of sunrise sectors—emerging industries like electric vehicles, semiconductors, renewable energy, and AI—in shaping India’s future. It highlights key drivers, challenges, and policy measures, offering a structured approach to understanding this crucial topic. A standout feature of this piece is its historical perspective—tracing the evolution of sunrise industries from the 1990s to today—helping aspirants build a strong analytical foundation for Mains answers.
PYQ ANCHORING & MICROTHEMES
- GS 1: Discuss the factors for localization of agro-based food processing industries of North-West India. [2019]
- GS 1: Do you agree that there is a growing trend of opening new sugar mills in the Southern states of India? Discuss with justification. [2013]
Microthemes: Secondary sector
While addressing Bharat Climate Forum 2025, Niti Ayog CEO highlighted the need for India becoming a global champion in sunrise sectors to achieve the target of becoming a developed nation by 2047 and become a USD 32 trillion economy.
EVOLUTION OF SUNRISE SECTORS IN INDIA
- 1990s: The first wave of sunrise industries emerged with IT, banking, telecom, aviation, and FMCG, driven by economic reforms.
- 2000s: The second phase saw the rise of retail, pharmaceuticals, petrochemicals, life sciences, and financial services.
- 2020s & Beyond: The third wave includes renewable energy, electric vehicles, AI, green hydrogen, space, startups, e-commerce, semiconductors, biotechnology, mining, and healthcare.
HIGH POTENTIAL SUNRISE SECTORS OF INDIA
| Industry | Current State | Key Growth Drivers |
| Electronics & Semiconductors | India’s electronics industry is projected to reach $300 Bn by FY26, with semiconductor demand surging to $64 Bn by 2026, nearly 3x its 2019 size ($22.7 Bn). Currently, 65% of the $155 Bn electronics market is domestically produced. | Government Incentives: PLI scheme, Semicon India Program (INR 76,000 Cr outlay), and schemes for semiconductor & display fabs (50% cost covered). Tech Expansion: Growth in 5G, AI, IoT, and consumer electronics. Make in India Initiative: Encouraging local manufacturing & exports. |
| Electric Vehicles (EV) | India aims for 30% EV adoption by 2030. Over 7.3 lakh electric two-wheelers registered in FY24. 12,146+ public EV charging stations installed nationwide. | FDI & Investment: 100% FDI allowed in EV sector. Government Support: FAME II scheme (subsidies for public charging infra), PLI scheme for Advanced Chemistry Cells (ACC), and battery swapping initiatives for two- & three-wheelers. Adoption Push: Two-wheelers and three-wheelers prioritized (target: 70-75% electrification by 2030). |
| Renewable Energy | India targets 500 GW of non-fossil fuel-based energy by 2030, marking the world’s largest renewable energy expansion plan. | Government Support: National Green Hydrogen Mission (INR 19,744 Cr), Offshore Wind Energy Targets, Wind-Solar Hybrid Policy. Growing Investment: India’s solar and wind energy sectors are attracting global investors due to favorable policies and high energy demand. |
| Agro & Food Processing | India’s agriculture sector is growing due to higher demand, exports, and better farming tech. The food processing industry is expanding rapidly. | Supply Chain Strengthening: Logistics schemes like Kisan Rath and Krishi Udaan. Digital Trading: e-NAM platform for online agri trade. PLI Scheme for Food Processing to boost exports. Sustainable Farming Initiatives: Paramparagat Krishi Vikas Yojana, Pradhanmantri Gram Sinchai Yojana. |
| Healthcare & Pharmaceuticals | India’s Medtech industry projected to reach $50 Bn by 2025. The country remains a global leader in vaccine production and generic medicines. | FDI & Pharma Growth: 100% FDI allowed in greenfield & brownfield projects. Healthcare Expansion: Ayushman Bharat scheme (world’s largest health protection scheme), medical tourism, and hospital infrastructure expansion. PLI for Pharma & MedTech: Incentives for drug manufacturing & medical device production. |
POTENTIAL IMPACTS OF INVESTING IN SUNRISE INDUSTRY
- Economic Growth – Investing in sunrise sectors fosters innovation, job creation, and industrial expansion, accelerating India’s journey toward becoming a global economic powerhouse.
- Sustainability – These industries support global sustainability goals by reducing fossil fuel dependency, promoting renewable energy, and aiding in climate change mitigation.
- Global Competitiveness – Leading in sunrise sectors like electric vehicles and solar manufacturing can position India as a global hub for advanced technology and innovation.
- Industrial Transformation – Emerging industries modernize traditional sectors, improving productivity, efficiency, and sustainability in areas like agriculture, infrastructure, and energy.
- Investment and Economic Resilience – A strong sunrise industry ecosystem attracts foreign investments, diversifies the economy, and reduces reliance on traditional industries, ensuring long-term economic stability.
CHALLENGES FACED BY THE SUNRISE SECTORS IN INDIA
| Category | Challenges | Examples |
| Technological Gap | Indian industries are lagging in areas like solar panel manufacturing and electric vehicles, often 5-7 years behind global leaders. This gap affects competitiveness and innovation. | India’s EV market is still in its nascent stage, while China dominates the global market with advanced battery technology and large-scale production. |
| Infrastructure and Investment Deficits | India’s infrastructure does not support the rapid expansion of emerging sectors. Additionally, private credit to GDP is lower compared to countries like the US and China, limiting industry scale-up. | Limited investments in clean tech R&D and manufacturing infrastructure hinder India’s ability to compete with global leaders. |
| Policy and Regulatory Bottlenecks | Lack of clear policies, slow regulatory approvals, and insufficient incentives for new industries. This slows down innovation, expansion, and global competitiveness. | India’s green energy policies still require deeper financial incentives and streamlined approvals to compete with global leaders. |
| Financial & Manpower Constraints | High capital costs, shortage of skilled professionals, and tax constraints make scaling up sunrise industries difficult. | Semiconductor manufacturing in India faces high investment requirements and limited local expertise. |
| Climate Impact on Agritech | Small-scale farmers face climate risks, requiring resilient farming techniques and technology-driven solutions. | Erratic weather patterns affect agricultural output, impacting the success of agritech innovations. |
| Geopolitical and Economic Risks | Wars, trade restrictions, and Centre-State policy variations can create uncertainty for investors and businesses. | Russia-Ukraine and Israel-Hamas conflicts affect global supply chains, impacting raw material availability. |
WAY FORWARD
- Increased Investment in Research and Development: India must invest heavily in R&D for sunrise sectors, particularly in clean technologies and electric vehicle manufacturing. Government-backed initiatives and partnerships with global players can help bridge technological gaps.
- Policy Support and Incentives: India should provide stronger policy frameworks, such as tax incentives, subsidies for clean tech investments, and faster clearances for new ventures in sunrise sectors. More investment in infrastructure, particularly for electric vehicle charging stations and renewable energy grids, is crucial.
#BACK2BASICS : SUNRISE SECTORS
What are the Sunrise sectors?
Sunrise sectors refer to rapidly growing industries that are in their early stages but have high potential for expansion. These sectors attract significant venture capital and are appealing for long-term growth prospects. Niti Aayog CEO believes that excelling in these sectors is crucial for India to meet its ambitious economic targets by 2047.
Key Sunrise Sectors:
- Electric Vehicles (EVs): With initiatives like FAME II, India aims to boost EV manufacturing and infrastructure. The sector is expected to grow significantly, contributing to sustainability and reducing dependence on fossil fuels.
- Electronics and Semiconductors: The semiconductor market in India is projected to triple by 2026, driven by government incentives and initiatives like the PLI Scheme. This sector is vital for establishing India as a global manufacturing hub.
- Renewable Energy: India is focusing on renewable energy sources, particularly solar power, where it currently lags behind globally by 5-7 years in manufacturing capabilities.
- Artificial Intelligence (AI) and advanced tech: It will drive innovation, economic growth, and global competitiveness.
