The policy centred around the theme of "Make in India", was first envisaged in the earlier Narendra Modi government under the then Commerce and Industry Minister Suresh Prabhu. New Commerce Minister Piyush Goyal has also given his inputs to the policy, sources said.
The policy would take an approach of cluster-based industrial areas, whereby a certain industrial area would have industries making a certain product.
People in the know said that it will subsume the National Manufacturing Policy, which was notified in 2011, in order to bring about a quantitative and qualitative change and to give necessary impetus to the manufacturing sector.
In line with the scheme of Digital India, the policy will also include the use of Internet of Things (IoT), Artificial Intelligence (AI) and robotic technology for advanced manufacturing. A Commerce Ministry Task Force has already submitted its report on the use of AI for economic transformation.
The new policy was ready by the end of the first term of the Modi government but not announced over concerns of likely repercussions in the general election on the back of its recommendations on labour reforms.
This announcement would be a change in convention as the country's industrial policy is generally announced separately and has never been a part of the budget.
In 1991, the government had announced a Statement of Industrial Policy, which reduced the requirement for industrial approvals thereby doing away with the "licence raj'. Subsequently, the National Manufacturing Policy was announced in 2011, with an aim to grow the share of manufacturing in gross domestic product to 25 per cent by 2022.
The new industrial policy will feature incentives for Indian players to make the country a manufacturing and exports hub to gain leverage of the US-China trade war, according to sources.
( With inputs from IANS )