Abstract. The article investigates the problems that Russian industry has encountered during the period of economic reforms. The author explores the reasons for the competitiveness decrease and contradictions that hinder the modernization of the domestic industry. Based on the analysis the principal concept is posed of the need in the implementation of the strategy of re-industrialization in Russia on a new technological basis. The basic directions of re-industrialization, the mechanisms of its implementation, as well as the impact on import substitution are considered. Substantial attention is paid to the risks inherent in a re-industrialization of Russia and the ways to overcome them. In recent years, geo-political and geo-economic challenges to the Russian economy and society greatly exacerbated the contradictions that emerged in the previous decades of economic evolution. During a long period of time the country tried to implement an economic policy intended, in principle, at achieving the strategic goal of creating a modern socially-oriented market economy on the base of modernization. However, the practical tools for implementation of this course – first of all, the ideology of “market fundamentalism” combined with the remaining powerful black market and “hand steering” by the government – caused stagnation and further de-industrialization of the country with inevitably negative implications for the manufacturing, science, education, human capital. Most recently, the Russian economy faced additional problems, namely, the Western sanctions, world economic slump and decline in world oil prices. That is why significant changes in the objectives and tools of economic policy are so urgent.