India Manufacturing Sector Performance Overview
India's manufacturing sector has demonstrated robust growth, contributing approximately 16-17% to GDP and employing over 27 million workers. The compounded annual growth rate (CAGR) 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 reached USD 44.24 billion, compared to USD 36.98 billion a year earlier, while manufacturing output grew 7.8 percent in June 2026.
Defence Manufacturing Transformation
India's defence industry achieved record indigenous production of ₹1.78 lakh crore in FY 2025–26, marking 15.6% growth from ₹1,54,071 crore in the previous fiscal and significant growth from ₹46,429 crore in 2014–15. Defence exports surged dramatically from ₹686 crore in 2013–14 to ₹38,424 crore in 2025–26, with products now exported to over 80 countries showing over 5,500% growth in twelve years. Defence PSUs and other PSUs contributed around 76% of total production, while the private sector's share rose 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 Growth
Electronics production rose from ₹11.32 lakh crore in FY 2024–25 to ₹13.11 lakh crore in FY 2025–26, representing a 15.8% year-on-year increase. Production of electronics goods grew from approximately ₹1.9 lakh crore in 2014–15 to ₹13.11 lakh crore in 2025–26, a seven-fold increase. Exports of electronics goods increased eleven times from approximately ₹38,000 crore to ₹4.24 lakh crore during the same period. Mobile phone production saw exceptional growth from approximately ₹18,000 crore to ₹6.27 lakh crore (33 times increase), while mobile phone exports surged 165 times from approximately ₹1,500 crore to ₹2.59 lakh crore.
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 expected to begin operations in 2026.
Mobile Manufacturing Achievements
India achieved 99.2% domestic production of mobile phones used domestically, becoming the world's second-largest mobile phone manufacturer by volume. The PLI scheme for Large Scale Electronic Manufacturing (LSEM) attracted approximately ₹96,000 crore in investments across the mobile manufacturing ecosystem. Domestic value addition reached 23% in FY 2023–24, and smartphones became India's top individual exported commodity in FY 2025–26. The Mobile Phone Manufacturing Scheme was approved on July 15, 2026, with a ₹62,500 crore budget to run from FY 2026–27 to FY 2030–31, offering incentives ranging from 2.25% to 5%.
Pharmaceutical Sector Performance
India ranks 3rd in volume and 11th in value in the global pharmaceutical industry, supplying 20% of the world's generic medicines. The sector's annual turnover reached ₹4.72 lakh crore in 2024-25. Three PLI schemes with 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 was 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. The Biopharma SHAKTI Scheme was announced in Union Budget 2026-27 with an outlay of ₹10,000 crores over five years.
Textiles and Apparel Sector
India's textile and apparel industry employs over 45 million people, contributing 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.
Maritime Sector Initiatives
A comprehensive package of ₹69,725 crore was announced in September 2025 to strengthen domestic shipbuilding capacity. The Shipbuilding Development Scheme (SbDS) has an outlay of ₹19,989 crore 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 and ₹5,000 crore Interest Incentivization Fund. The Shipbuilding Financial Assistance Scheme (SBFAS) allocated ₹24,736 crore, and the Container Manufacturing Assistance Scheme (CMAS) allocated ₹10,000 crore over five years to target annual domestic capacity of up to 7.5 lakh TEUs.
Automobile Industry Performance
The automobile sector provides 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 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, with ₹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 Expansion
India's domestic solar PV market is valued at approximately ₹32,400 crore and is expected to grow at 17–20% CAGR between FY23 and FY30. 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 and awarded 48 GW integrated PV capacity. PV exports in FY25 were eight times higher than in FY18.