How is India’s Manufacturing Sector Gaining Momentum?
Synopsis
India’s manufacturing sector is making significant strides with impressive GVA growth rates, reflecting a shift towards high-value production and enhanced technology adoption. This development positions India favorably in the global industrial landscape, aiming to achieve a $35 trillion economy by 2047. Discover how recent economic measures are bolstering this growth.
Key Takeaways
GVA growth of 7.72% in Q1 FY26 GVA growth of 9.13% in Q2 FY26 Shift towards higher-value production India's ranking improved to 37th in CIP index Union Budget reinforces manufacturing support Real Industry GVA growth of 7% Industrial production rose 7.8% in December 2025 PMI remains above 50 since March 2023
New Delhi, Feb 12 (NationPress) India’s manufacturing sector has witnessed considerable growth in recent quarters, achieving a GVA (Gross Value Added) growth of 7.72% in Q1 FY26 and 9.13% in Q2. This positive trend is bolstered by a gradual transition towards higher-value production, enhanced industrial infrastructure, and the increased use of technology and formal processes, as stated in an official report released on Thursday.
The Economic Survey 2025-26 reveals that medium- and high-tech industries now account for 46.3% of India’s manufacturing value added, indicating a shift towards a more sophisticated production landscape.
“Reflecting these advancements, India’s global industrial competitiveness has improved, with the country climbing to 37th place in the Competitive Industrial Performance (CIP) index in 2023, up from 40th in 2022,” the report noted.
Manufacturing plays a pivotal role in India’s goal to become a $35 trillion economy by 2047, supported by reforms, sectoral initiatives, and resilient supply chains.
The report also highlighted that the Union Budget 2026-27 has reinforced support for the manufacturing sector through targeted initiatives focusing on investment incentives, innovation, infrastructure enhancement, and strengthening the industrial ecosystem.
Furthermore, industrial activity remains robust, with real Industry GVA expanding by 7% year-on-year in the first half of FY 2025-26.
This upward momentum extended into the year, as industrial production surged 7.8% in December 2025, marking the strongest growth in over two years, following a revised estimate growth of 7.2% in November 2025.
“This growth, evident in the Index of Industrial Production (IIP), is largely attributed to the manufacturing sector, which saw an increase of 8.1% in December 2025. Notable growth was recorded in sectors such as computer and electronic products (34.9%), motor vehicles and trailers (33.5%), and other transport equipment (25.1%),” said the government.
Looking ahead, forward-looking indicators continue to show optimism in India’s industrial sector, with the manufacturing Purchasing Managers’ Index (PMI) consistently remaining above the expansion threshold (over the 50 mark) since March 2023.
In January 2026, the PMI registered 55.4, above its long-term average, suggesting ongoing improvements in the sector's health.
Point of View
I view the recent advancements in India's manufacturing sector as a vital step towards achieving economic resilience. With strategic reforms and a focus on high-value production, India is setting the stage for a competitive global presence. This growth not only reflects a shift in industrial capabilities but also reinforces our long-term vision of economic prosperity.
NationPress
11 May 2026
Frequently Asked Questions
What is the recent GVA growth rate of India's manufacturing sector?
India's manufacturing sector has reported a GVA growth rate of 7.72% in Q1 FY26 and 9.13% in Q2.
What factors are contributing to the growth of India's manufacturing sector?
The growth is supported by a shift towards higher-value production, improved industrial infrastructure, and increased technology adoption.
How has India's ranking in the Competitive Industrial Performance index changed?
India's ranking improved from 40th in 2022 to 37th in 2023 in the Competitive Industrial Performance index.
What role does manufacturing play in India's economic ambitions?
Manufacturing is key to India's goal of becoming a $35 trillion economy by 2047, supported by reforms and resilient supply chains.
What does the recent Union Budget indicate for the manufacturing sector?
The Union Budget 2026-27 has reinforced support for manufacturing through targeted measures focusing on investment incentives and ecosystem strengthening.
