The Missing Middle: Why India Needs to Build A National Capability Translation Ecosystem

Three recent developments in India’s industrial discourse have quietly pointed towards a deeper shift in the country’s industrial imagination.

On 9 May, Vedanta Group said that India needs to accelerate domestic exploration of natural resources and operationalise such resource assets faster, to reduce import dependence and strengthen long-term resource security. It further said that vulnerabilities in global energy and mineral supply chains are structural, not cyclical, as India remains heavily dependent on imports for crude -oil and several key resources.

On the same day, Deloitte published a report saying India's mining sector has the potential to contribute an additional $500 billion to the economy and create up to 25 million incremental jobs by 2047, but achieving this will require a major shift towards "Mining 5.0" driven by artificial intelligence, integrated digital systems, and sustainable operations.

Yesterday, the Union Cabinet approved the Scheme for Promotion of Surface Coal/Lignite Gasification Projects with a total financial outlay of ₹37,500 crore. The scheme is intended to accelerate India's coal and lignite gasification programme and support the national target of gasifying 100 million tonnes of coal by 2030. The scheme aims draw ₹2.5-3.0 lakh crore in investments, generate ₹6,300 crore revenue annually, and create around 50,000 jobs in coalfield regions.

At first glance, these developments appear to be a government-industry-consultancy exhortation: invest more, mine more, produce more.

But beneath them lies a more important question.

What if — India’s next developmental leap depends not merely on extracting more resources or assembling more products, but on building the industrial and institutional systems that connect resources, science, engineering, and production into long-term capability ecosystems?

This is the layer India repeatedly underbuilds.

The country often succeeds at creating:

- extraction capacity,

- scientific talent,

- engineering manpower,

- prototypes,

- or assembly ecosystems.

But it struggles to build the “middle layers” that transform one level into another over long periods.

This "missing middle" appears across sectors:

- resources without downstream transformation,

- discoveries without industrial deployment,

- talent without institutional continuity,

- and manufacturing without material sovereignty.

India’s future industrial strength may ultimately depend on whether it learns to build this missing middle deliberately.

Self-Reliance Must Start Underground

Over the last decade, India’s self-reliance push has evolved in phases.

Initially, the emphasis was on assembling finished products domestically. Then came the push toward domestic component manufacturing. Today, the conversation is gradually shifting further upstream — toward the resources and materials that underpin industrial systems themselves.

This shift is not ideological. It is structural.

Modern industrial economies depend on continuous access to critical minerals, speciality metals, hydrocarbons, and processed chemical feedstocks.

Electric vehicles and battery systems depend on lithium, cobalt, nickel, graphite, and advanced copper systems.

Renewable energy systems depend on rare earths, silicon, speciality magnets, and advanced materials.

Electronics manufacturing depends on speciality chemicals, semiconductor materials, precision alloys, and rare earth compounds.

Defence systems depend on titanium, tungsten, beryllium, advanced composites, and specialised metallurgical capabilities.

In a world of increasingly fragmented supply chains, these are no longer merely commodities. They are strategic inputs.

India’s vulnerability is not difficult to identify.

The country imports the overwhelming majority of its crude oil requirements. It remains heavily dependent on imported speciality materials, electronics components, advanced alloys, fertiliser feedstocks, and precision industrial inputs. China dominates multiple layers of global materials processing and downstream industrial supply chains.

This creates a structural problem.

A country may assemble products domestically and still remain strategically vulnerable if the material and molecular foundations of those products remain externally controlled.

This is why the rediscovery of resource strategy matters.

But resource sovereignty cannot simply mean extracting more minerals and exporting raw materials at scale.

That model has historically produced shallow industrialisation in many parts of the world:

- extraction without transformation,

- exports without ecosystem depth,

- and local resource wealth without regional industrial capability.

The real question is not whether India can mine more.

It is whether India can transform its resource base into long-term industrial capability.

From Coal Extraction to Coal Transformation

India has built significant extraction capacity.

What it has not fully built is a transformation economy around its resources.

The distinction matters.

An extraction economy primarily removes raw materials from the ground and transports them outward.

A transformation economy converts those resources into industrial molecules, materials, intermediate products, and downstream manufacturing ecosystems.

This distinction becomes especially important in the context of coal.

For decades, India has largely treated coal as a fuel to be mined and burned.

This approach was understandable. Coal still anchors the majority of India’s electricity generation, and its contribution to energy security remains substantial.

But coal is not merely a combustion resource.

Modern coal gasification systems can convert coal into syngas — a combination of carbon monoxide and hydrogen that serves as a foundational industrial molecule.

From syngas, one can produce:

- methanol,

- ammonia,

- urea,

- synthetic natural gas,

- hydrogen,

- and multiple downstream chemical intermediates.

This changes the entire industrial meaning of coal.

Instead of functioning only as an energy input, coal becomes a platform resource capable of anchoring chemical and industrial ecosystems.

India has begun moving cautiously in this direction.

But they also reveal the deeper problem.

India often builds the upstream layer without sufficiently building the downstream ecosystem that must absorb and scale the output.

Gasification plants alone do not create transformation economies.

The downstream ecosystem matters equally:

- fertiliser plants,

- methanol systems,

- chemical processing,

- industrial intermediates,

- materials ecosystems,

- logistics,

- and manufacturing integration.

This is where India’s “missing middle” begins to appear.

The country has partially built extraction systems. It has partially built manufacturing systems. But the translation layer connecting the two remains underdeveloped.

From Resource Geographies to Industrial Geographies

The implications of this are especially important for India’s resource-rich regions.

Jharkhand, Odisha, Chhattisgarh, eastern Madhya Pradesh, parts of West Bengal, and Assam contain some of India’s most significant mineral and coal reserves.

Yet many of these regions continue to exhibit relatively weak industrial depth and lower human-development outcomes.

This reflects a broader developmental paradox: resource-rich regions often remain economically shallow when extraction operates independently of downstream industrial ecosystems.

Traditional extraction economies frequently generate:

- royalty flows,

- transportation activity,

- and isolated employment, 

while much of the long-term value creation migrates elsewhere.

A transformation economy changes this dynamic.

When processing, refining, materials engineering, downstream chemicals, manufacturing systems, and technical institutions -- develop near resource zones, extraction regions begin evolving into industrial ecosystems.

This creates layered employment gradients:

- high-skill engineering and process jobs,

- mid-skill industrial operations,

- logistics and maintenance systems,

- construction ecosystems,

- technical education institutes,

- and eventually, regionally rooted industrial middle classes.

India has already begun seeing early signals of this model.

Vedanta’s zinc derivatives industrial park near Udaipur aims to build downstream chemical and materials ecosystems adjacent to extraction and smelting infrastructure.

Similarly, the Aditya Birla Group’s aluminium ecosystem in Odisha has evolved beyond primary metal production toward downstream materials applications, including battery-grade aluminium foil manufacturing.

These examples matter because they demonstrate a broader principle: The real economic multiplier often emerges not from extraction itself, but from the industrial ecosystems built around extraction.

This suggests a very different developmental possibility for India.

Instead of viewing mining regions as isolated extraction belts, India could begin viewing them as:

- resource-linked industrial corridors,

- molecular transformation zones,

- materials engineering clusters,

- and distributed manufacturing ecosystems.

Such a model would also gradually alter India’s industrial geography itself.

For decades, Indian industrialisation has tended to concentrate heavily around:

- metropolitan regions,

- coastal logistics systems,

- and service-sector urban clusters.

A resource-linked industrial strategy could generate a more geographically distributed industrial architecture.

This would not eliminate existing industrial centres.

But it could create additional inland industrial ecosystems anchored in:

- materials,

- process industries,

- chemicals,

- metallurgy,

- advanced manufacturing,

- and industrial engineering.

The Resource–Materials–Industry Corridor

India’s industrial future will increasingly depend on how effectively it builds continuity across the following chain:

- geology,

 -extraction,

- metallurgy,

- chemical processing,

- materials science,

- additive manufacturing,

- and industrial deployment.

At present, these domains often exist in fragmented institutional silos.

But advanced industrial systems treat them as part of one continuous capability ecosystem.

This corridor is not merely about mining more minerals.

It is about building strategic materials capability.

This includes:

- speciality alloys,

- advanced composites,

- conductive materials,

- battery materials,

- industrial powders,

- semiconductor materials,

- and engineered manufacturing feedstocks.

One particularly under-recognised layer in this ecosystem is powderisation and additive manufacturing.

Modern advanced manufacturing increasingly depends on highly controlled particulate feedstocks capable of enabling:

- precision engineering,

- rapid prototyping

- complex industrial geometries

- reduced material wastage,

- high- tech applications,

- and distributed manufacturing

This layer, thus, acts as a force multiplier across sectors.

Yet it requires deep interdisciplinary integration:

- chemistry,

- geology

- metallurgy,

- materials science,

- thermal engineering,

- and product design & development systems

This is precisely the type of ecosystem that small, research-intensive institutions can sustain over long periods.

India’s challenge is therefore not simply scientific discovery.

It is: building the institutional continuum capable of converting materials knowledge into industrial systems.

Institutions of Capability: Beyond Talent Pipelines

This is where India’s educational architecture enters the discussion.

India’s higher education system has been remarkably successful at producing talent pipelines.

The IITs and IIMs have become globally recognised institutions capable of:

- identifying talent,

- training skilled graduates,

- and integrating them into the economy efficiently.

But many of India’s emerging strategic challenges require something beyond talent movement.

They require institutional continuity.

Long-horizon industrial capabilities depend on:

- sustained research ecosystems,

- interdisciplinary integration,

- accumulated process knowledge,

- engineering continuity,

- and government mission linkages.

This is where the Indian Institute of Science occupies a distinct position within India’s institutional landscape.

Unlike placement-oriented institutions, IISc operates as a relatively small, deeply research-oriented ecosystem capable of sustaining long-duration scientific and engineering capability.

The question, therefore, is not simply whether India needs more IITs.

It is whether India needs more institutions that function as capability anchors.

This is where the idea of recalibrating the IISERs into broader IISc-like institutions becomes strategically important.

India already possesses:

- geographically distributed scientific institutions,

- strong academic foundations,

- and emerging R&D ecosystems.

What remains underdeveloped is the integration layer connecting:

- science,

- engineering,

- materials,

- industrial systems,

- and national missions.

Can India's Quantum Development Bridge the Gap?

On 14 April 2026, Andhra Pradesh Chief Minister Chandrababu Naidu inaugurated the Amaravati Quantum Reference Facilities at SRM University-AP.

The achievement was genuine.

India’s first indigenous, open-access quantum computing platforms had been assembled through collaboration among multiple Indian institutions across several cities, with substantial domestic participation in the supply chain.

Unlike many inflated technology announcements, this represented a real machine, operating at cryogenic temperatures, ready for scientific use.

Its research agenda included quantum-assisted materials simulation and device-oriented experimentation.

The significance of this breakthrough was not merely technological.

It demonstrated that Indian academic and research institutions are increasingly capable of contributing meaningfully to frontier scientific systems.

Quantum computing, particularly in materials science, can potentially accelerate:

- electronic-structure calculations,

- alloy optimisation,

- battery-materials discovery,

- semiconductor-materials research,

- and substitution pathways for strategically imported materials.

For India, this is not merely an academic opportunity.

It is increasingly a sovereignty question.

The country remains deeply dependent on imported speciality materials, advanced alloys, rare earth compounds, and precision industrial inputs.

Quantum-assisted materials discovery could eventually help reduce some of these vulnerabilities.

But the Amaravati milestone also reveals the deeper institutional challenge.

Suppose a quantum-assisted system predicts a promising new material.

Who synthesises it? Who validates it? Who certifies it? Who scales it? Who integrates it into manufacturing?

This is where the “missing middle” appears again.

Scientific discovery alone is insufficient.

Industrial capability emerges only when discovery is connected to:

- pilot synthesis,

- testing systems,

- additive-manufacturing infrastructure,

- process engineering,

- industrial validation,

- and scalable manufacturing integration.

In other words, even frontier technologies such as quantum computing remain inadequate without translation infrastructure.

This is why institutions matter so deeply.

The role of IISc-like, IISER-derived capability institutions is not simply to produce scientific papers or isolated breakthroughs.

Their deeper role is to sustain long-horizon scientific ecosystems capable of feeding into national industrial missions over decades.

The challenge, therefore, is not merely to fund advanced science.

It is to build institutional systems that continuously connect:

- science to engineering,

- engineering to manufacturing,

- and manufacturing to long-term industrial capability.

The Translation Layer India Keeps Missing

India has already encountered this structural problem in other sectors.

The Chips-to-Startup programme successfully expanded domestic chip-design capability through:

- training,

- design ecosystems,

- EDA-tool access,

- and MPW participation.

But one question persisted: Where would these chips actually be fabricated domestically?

The answer partially emerged through the upgradation of the Semiconductor Laboratory (SCL) in Mohali into a more open-access prototyping and fabrication ecosystem.

For the first time, Indian designers could move more directly from design toward fabrication without entirely depending on foreign infrastructure.

The materials challenge has the same structure.

India is gradually building:

- quantum discovery systems,

- scientific talent,

- materials simulations,

- and industrial ambitions.

But it still lacks sufficient:

- pilot synthesis systems,

- process-engineering infrastructure,

- testing ecosystems,

- validation frameworks,

- and industrial integration facilities.

This missing middle appears repeatedly across sectors.

In pharmaceuticals, scientific research often struggles to scale into globally competitive manufacturing ecosystems without major industrial infrastructure.

In aerospace, components and subsystems frequently require certification ecosystems that take decades to mature.

In coal chemistry, gasification systems require downstream industrial absorption layers.

In advanced materials, discoveries require synthesis, validation, processing, and manufacturing integration.

The pattern is remarkably consistent.

The top layer receives visibility because it is media-compatible and politically visible.

The middle layer is slower, less glamorous, coordination-heavy, and institutionally difficult.

But it is often where industrial civilisation actually consolidates itself.

Historically, advanced industrial powers built enormous amounts of media-invisible infrastructure of this kind:

- pilot plants,

- standards systems,

- process-engineering institutes,

- testing facilities,

- certification ecosystems,

- and manufacturing demonstrators.

These systems rarely dominate headlines.

But they often determine whether scientific capability becomes industrial capability.

India increasingly needs analogous institutions.

A distributed, multi-centre National Industrial Capability Translation Ecosystem would represent one possible response.

Such facilities could integrate:

- simulation,

- synthesis,

- testing,

- additive manufacturing,

- process engineering,

- and industrial validation 

into one continuous ecosystem.

The goal would not simply be scientific discovery. It would be capability accumulation and translation.

From Economic Growth to Capability Translation 

Taken together, the recent developments I pointed out represent a broader shift in India's developmental thinking.

For decades, India’s post-1991 growth model largely revolved around:

- integration into global markets,

- labour-cost advantages,

- services exports,

- consumption expansion,

- and selective manufacturing participation.

That model generated substantial economic gains.

But the emerging global environment is changing the developmental equation.

The world is entering a period increasingly shaped by:

- supply-chain fragmentation,

- strategic stockpiling,

- techno-industrial blocs,

- mineral nationalism,

- energy-transition competition,

- and industrial-security concerns.

In such a world, shallow industrialisation becomes increasingly vulnerable.

Countries capable only of:

- component assembling,

- low-cost labour integration,

- or raw-material exports 

may find themselves strategically dependent during periods of disruption.

This is why India’s next phase of development may require something deeper: an industrial capability accumulation and translation ecosystem. 

That means progressively building interconnected strength across:

- resources,

- molecular transformation,

- materials science,

- industrial engineering,

- manufacturing systems,

- and long-horizon research institutions

Its objective is not merely growth. Its objective is durable industrial depth.

And importantly, such a model does not depend exclusively on either the state or private industry.

It requires hybrid ecosystems, involving:

- public institutions,

- private industry,

- research universities,

- engineering systems,

- industrial corridors,

- and enabling policy and government stability

The challenge is therefore not merely economic, but systemic.

Conclusion: Building the Missing Middle 

India does not fundamentally lack scientific intelligence, engineering talent, mineral resources, entrepreneurial ambition, or industrial aspiration. We increasingly possesses all of these.

What we repeatedly lack are the connecting systems that transform one layer into another over long periods.

This "missing middle" now appears across sectors -- from semiconductors and electronics, to batteries and electric vehicles, to resource extraction industries.

India’s next developmental leap may therefore depend less on isolated breakthroughs, and more on whether we can systematically build the middle layers that connect:

- resources to materials,

- science to engineering,

- engineering to manufacturing,

- and manufacturing to durable capability.

The future will ultimately belong not merely to nations that innovate, but to nations that simultaneously build the middle.