Overview of Manufacturing Sector Growth in India

The manufacturing sector led over half of the new project announcements in the June 2025 quarter, marking a significant trend in the industry. This rise is notable for its potential impact on job creation and economic growth.

Key Statistics and Trends

• Manufacturing projects announced were valued at approximately ₹2.3 trillion, accounting for 54% of the total new projects.
• This is the highest share in 10 quarters and has occurred less than six times since 2010.

Role of Government and Private Sector

The government has been a major driver of capital expenditure through infrastructure investments. Manufacturing's significant role in private capex signals its importance for economic growth.

Job Creation and Economic Impact

• India needs to create about 7.9 million new non-farm jobs annually until 2030, making manufacturing crucial.
• Capex for manufacturing rose to ₹60,000 crore in June 2024, indicating a positive trend.

Influences on Manufacturing Growth

• China's strategic withdrawal from certain sectors has benefited Indian manufacturing.
• Global efforts to derisk manufacturing dependency on China have favored India.
• Domestic companies are increasingly utilizing their productive capacities, encouraging further investment.

Sector-specific Developments

• Metals and metal products comprised 34.3% of new capex announcements, followed by chemicals (8.3%) and machinery (3.5%).
• Significant projects include Vedanta’s Dhenkanal Aluminium Smelter Project and Deepak Nitrite’s manufacturing complex for chemicals.

Future Prospects

• Growth is expected in sectors like pharmaceuticals, defense, electronics, and auto components.
• These sectors are globally recognized for India's competitive focus on cost and quality.