India Manufacturing Sector Achieves Robust Growth Across Key Industries

India Manufacturing Sector Achieves Robust Growth Across Key Industries

India's manufacturing sector has demonstrated significant growth, contributing approximately 16-17% to GDP and employing over 27 million workers. The compounded annual growth rate of Manufacturing GVA at constant prices (2022-23 base) reached 10.88% during the period 2022-23 to 2025-26. Merchandise exports in July 2026 stood at USD 44.24 billion, compared to USD 36.98 billion a year earlier, while manufacturing output grew by 7.8% in June 2026.

Defence Manufacturing Transformation

India's defence industry has achieved remarkable growth with indigenous production reaching a record ₹1.78 lakh crore in FY 2025–26, representing 15.6% growth from ₹1,54,071 crore in the previous fiscal and a substantial increase from ₹46,429 crore in 2014–15. Defence exports surged from ₹686 crore in 2013–14 to ₹38,424 crore in 2025–26, with Indian defence products now exported to over 80 countries, showing more than 5,500% growth in the last twelve years. Defence PSUs and other PSUs contributed around 76% of total production in FY 2025–26, while the private sector's share increased to 24%. Ten Positive Indigenisation lists covering 5,521 items were notified till May 2026, and the Srijan Defence Equipment Empowerment Platform (DEEP) listed over 41,000 vendors and 2.7 lakh products as of May 2026.

Electronics Manufacturing Expansion

Electronics production increased from ₹11.32 lakh crore in FY 2024–25 to ₹13.11 lakh crore in FY 2025–26, a 15.8% year-on-year growth. Production of electronics goods grew from approximately ₹1.9 lakh crore in 2014–15 to ₹13.11 lakh crore in 2025–26 (7 times growth), while exports increased from ₹38,000 crore to ₹4.24 lakh crore (11 times growth). Mobile phone production surged from ₹18,000 crore to ₹6.27 lakh crore (33 times growth), and mobile phone exports expanded from ₹1,500 crore to ₹2.59 lakh crore (165 times growth). India now produces 99.2% of mobile phones domestically and has become the world's second-largest mobile phone manufacturer by volume, transitioning from net importer to net exporter since 2014.

Semiconductor Manufacturing Development

The Semicon India Programme 1.0 was approved in December 2021 with an outlay of ₹76,000 crore, followed by Semicon 2.0 approved in July 2026 with a total budget outlay of ₹1,27,500 crore. As of July 2026, twelve manufacturing units have been approved with investments exceeding ₹1.64 lakh crore, including one silicon fab, one silicon carbide fab, an integrated Gallium Nitride Micro LED display fab, and nine packaging units. Three companies—Micron, Kaynes, and CG Semi—have already started commercial production, with one more company expected to begin operations in 2026. The PLI scheme for Large Scale Electronic Manufacturing attracted approximately ₹96,000 crore in investments across the mobile manufacturing ecosystem, with domestic value addition reaching 23% in FY 2023–24.

Pharmaceutical Sector Growth

India ranks third in volume and eleventh in value in the global pharmaceutical industry, supplying 20% of the world's generic medicines and a significant share of vaccines. The sector's annual turnover reached ₹4.72 lakh crore in 2024-25. Three PLI schemes with a total budgetary outlay of ₹25,360 crore attracted over ₹51,997 crore in investments and achieved ₹3.88 lakh crore in cumulative sales, including exports exceeding ₹2.43 lakh crore. Manufacturing capacity has been created for 218 APIs/KSMs/drug intermediates and 57 medical devices. Medical device exports increased from ₹26,915 crore in 2019–20 to ₹42,360 crore in 2024–25, while domestic manufacturing rose from ₹28,000 crore to ₹41,500 crore during the same period. The Biopharma SHAKTI Scheme was announced in Union Budget 2026-27 with an outlay of ₹10,000 crores over five years.

Textiles and Apparel Industry

India's textile and apparel industry is the second-largest employer after agriculture, providing livelihoods to over 45 million people. The sector contributes approximately 2% to national GDP, 11% to manufacturing GVA, and 9% of merchandise exports. In FY2025, India exported textile products worth USD 37.7 billion, accounting for 4.1% of global textile and apparel exports, making it the sixth-largest textile exporter globally. Government initiatives include the PLI Scheme for Textiles, PM MITRA Parks, National Technical Textiles Mission, Textiles Export Promotion Mission, National Fibre Mission, and Mission for Cotton Productivity.

Maritime and Shipbuilding Initiatives

In September 2025, a comprehensive package of ₹69,725 crore was announced to strengthen domestic shipbuilding capacity, maritime financing, and skilling. The Shipbuilding Development Scheme (SbDS) has an outlay of ₹19,989 crore aiming to increase India's annual shipbuilding capacity to 4.5 million Gross Tonnage. The Maritime Development Fund has a corpus of ₹25,000 crore, including a ₹20,000 crore Maritime Investment Fund with 49% Government equity participation and a ₹5,000 crore Interest Incentivization Fund. The Shipbuilding Financial Assistance Scheme (SBFAS) allocated ₹24,736 crore, with guidelines issued on 26 December 2025. The Container Manufacturing Assistance Scheme (CMAS) was announced in Union Budget 2026-27 with ₹10,000 crore allocation over five years, targeting annual domestic capacity of up to 7.5 lakh TEUs. In July 2026, India rolled out its first domestically manufactured EXIM shipping container for A.P. Moller–Maersk.

Automobile Industry Performance

The automobile sector provides direct and indirect employment to over 30 million people across India. Vehicle production increased from 22.65 million units in FY21 to 31.03 million units in FY25, with overall production growing by nearly 33% between FY15 and FY25. The PLI Scheme for Automobile & Auto Components Industry, approved in September 2021 with an outlay of ₹25,938 crore, attracted ₹44,326 crore in investment by March 2026 and generated 67,820 jobs. The PM E-DRIVE Scheme, launched in September 2024 with an outlay of ₹10,900 crore, provides incentives for approximately 28.30 lakh EVs, including ₹4,391 crore allocated for 14,028 e-buses (14,000 already deployed) and ₹2,000 crore for EV public charging stations.

Solar PV Manufacturing Growth

India's solar PV manufacturing sector has expanded rapidly with the domestic PV market valued at approximately ₹32,400 crore and expected to grow at 17–20% CAGR between FY23 and FY30. The Approved List of Models and Manufacturers (ALMM) listed solar module capacity reached 100 GW in August 2025, up from nearly 2.3 GW in 2014. Solar cell manufacturing capacity reached 25 GW in March 2025, increasing from less than 1.2 GW in 2014. The PLI scheme for high-efficiency solar PV module manufacturing has two tranches with total funding of ₹24,000 crore, awarding 48 GW integrated PV capacity. PV exports in FY25 were eight times higher than in FY18.