By Sourav Shekhar
New Delhi, Feb 12 (UNI) India has emerged as the fastest-growing industrial economy, with global manufacturing output expanding modestly by 0.7 per cent in the third quarter of calendar year 2025, an official statement said on Thursday.
During the same period, India recorded manufacturing output growth of 1.3 per cent with sustained policy support for industrial expansion.
Doubtlessly, manufacturing sits as the engine of growth for India’s ambition to become a USD 35 trillion economy by 2047 with reforms, sectoral initiatives and resilient supply.
The Indian manufacturing sector is poised to drive India’s growth, employment generation, export competitiveness, and long-term economic transformation. India’s manufacturing robustness is also highlighted in government data as the real GVA growing at 7pc year-on-year in the first half of FY 2025-26, and the Index of Industrial Production (IIP) registered a growth rate of 8.1 per cent in December 2025.
All these initiatives show the government’s sustained push towards manufacturing-led growth. Going ahead with this, the 2026-27 budget is also guided by the government’s vision of ‘Aatmanirbharta’ and ‘Sankalp,’ the statement said .’
Additionally, the Economic Survey 2025-26 also pointed to the paradigm shift in the manufacturing sector as industries now contribute about 46.3 per cent of overall manufacturing.
Micro, Small, and Medium Enterprises (MSMEs) remain central to India’s industrial economy, contributing about 35.4 per cent of manufacturing output, 48.58 per cent of exports, and 31.1per cent of GDP. Fortunately, this sector also generated employment for over 32.82 crore people across 7.47 crore enterprises, which makes it the largest employment-generating sector after agriculture.
Taking cognisance of these factors, the government has unveiled a comprehensive set of measures aimed at accelerating economic growth through promoting manufacturing in strategic and frontier sectors.
The 2026-27 budget rolled out several new schemes and programmes focusing on high-impact and emerging industries, such as: (i) Rejuvenation of Legacy Industrial Sectors, (ii) Biopharma SHAKTI, (iii) Semiconductor Mission 2.0, (iv) Tax and Customs Reforms to Promote Manufacturing (v) Performance Linked Incentive (PLI) scheme.
Moreover, investments are also fueling the industrial expansion process. As per government data, the investment momentum continues to support economic growth in FY26 with the share of Gross Fixed Capital Formation (GFCF) estimated at 30pc.
GFCF measures the net increase in an economy’s fixed assets, such as machinery, buildings, and infrastructure, during a specific period, excluding depreciation.
The government is focusing on integrating innovation in manufacturing by unveiling institutions such as Anusandhan National Research Foundation (ANRF) under the ANRF Act 2023.
The act aimed to provide strategic direction, funding support, and strong collaboration between industry, academia, and government.
To foster innovation financing in the manufacturing sector, the centre announced a Research, Development and Innovation (RDI) fund with a Rs 1 lakh crore outlay over six years, including Rs 20,000 crore for FY26. These measures are yielding great results as India now ranks among the top five countries in 45 of 64 critical technologies.
Another groundbreaking initiative is the National Manufacturing Mission (NMM), which was announced in the budget 2025-26, acting as a catalyst of industrial growth. The scheme is targeting a rise in manufacturing’s GDP share to 25pc by 2035.
It also aims to create 143 million jobs and the expansion of merchandise exports to USD 1.2 trillion by deeper global value chain integration.
As highlighted earlier, the 2026-27 budget offered key tax exemptions such as exemption from income tax for five years, provision of safe harbour, deferred duty payment, increase in the limit of duty-free imports for specified inputs, regular importers with trusted, longstanding supply chains and so on.
PM GatiShakti has also transformed infrastructure planning through a unified platform. It has integrated over 1,700 data layers across 57 ministries and departments, while PM GatiShakti Public and Unified Geospatial Interface now provides 230 datasets for investment and logistic planning.
In line with PM GatiShakti scheme, the National Logistics Policy (NLP) connects 44 systems across 11 ministries, covering 2,000 data fields, supporting over 1,700 companies and enabling 200 crore API transactions.
Above all, the production-linked incentive (PLI) scheme introduced by the government has emerged as a major catalyst of growth across fourteen sectors. Prime beneficiaries of this scheme were electronics, pharmaceuticals and automobile manufacturing.
