EP 63 | The Hidden Side of Manufacturing: Inside India’s Strategy of Multi-Plants
Description
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.
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