India’s Manufacturing Sector Gains Momentum with Strong GVA Growth

New Delhi- India’s manufacturing sector has shown significant strengthening in recent quarters, recording robust growth in Gross Value Added (GVA). The sector registered a growth of 7.72 per cent in the first quarter of FY26 and further accelerated to 9.13 per cent in the second quarter, supported by a gradual transition towards higher-value production, enhanced industrial infrastructure, increased technological adoption, and formalisation.

According to the Economic Survey 2025-26, medium- and high-technology industries now account for 46.3 per cent of India’s total manufacturing value added, indicating a steady shift toward more advanced and sophisticated production systems.

Reflecting this progress, India’s global industrial competitiveness has improved, with the country’s position in the Competitive Industrial Performance (CIP) Index improving to 37th place in 2023 from 40th in 2022.

The government highlighted that manufacturing remains a key driver of India’s long-term economic goal of becoming a $35 trillion economy by 2047. The sector’s growth is being supported by ongoing reforms, targeted sectoral initiatives, and the development of resilient supply chains.

The Union Budget 2026-27 has further strengthened the manufacturing sector by introducing focused measures aimed at promoting investment, encouraging innovation, improving infrastructure, and strengthening the overall industrial ecosystem.

Industrial activity has continued to show strong momentum, with real Industry GVA growing by 7 per cent year-on-year during the first half of FY 2025-26. This growth trend extended into the later part of the year, with industrial production rising by 7.8 per cent in December 2025, marking the highest expansion in more than two years. This followed a revised growth rate of 7.2 per cent recorded in November 2025.

The Index of Industrial Production (IIP) data shows that the manufacturing sector played a major role in this expansion, recording a growth of 8.1 per cent in December 2025. Among manufacturing segments, notable growth was seen in computer and electronic products, which expanded by 34.9 per cent, followed by motor vehicles and trailers at 33.5 per cent, and other transport equipment at 25.1 per cent.

Forward-looking indicators continue to reflect optimism regarding India’s industrial performance. The manufacturing Purchasing Managers’ Index (PMI) has remained firmly in the expansion zone, staying well above the 50-mark since March 2023. In January 2026, the PMI stood at 55.4, which is above its long-term average and indicates sustained improvement in the sector’s overall health.

With inputs from IANS