India’s industrial sector continues to exhibit strong momentum, supported by reforms in infrastructure, logistics, ease of doing business, and innovation systems, as per the Economic Survey 2025-26. The survey emphasizes the need for a shift towards scale, competitiveness, innovation, and deeper integration into Global Value Chains (GVCs) in the upcoming phase of industrialization. It suggests building strategic resilience through diversification and enhancing capabilities rather than focusing solely on self-reliance.
Manufacturing Gross Value Added (GVA) in India saw significant growth of 7.72% and 9.13% in the first two quarters of FY26, driven by structural shifts within the sector. The survey, presented by Finance Minister Nirmala Sitharaman, highlights a clear uptick in industrial performance with a 7.0% year-on-year growth in real terms in the first half of FY2025-26, compared to 5.9% in the previous fiscal year.
The survey attributes the growth in medium and high-technology activities, accounting for 46.3% of India’s total manufacturing value added, to government initiatives like the Production Linked Incentive (PLI) schemes and the India Semiconductor Mission. India’s global competitiveness has improved, with its ranking in Competitive Industrial Performance (CIP) rising to 37th in 2023 from 40th in 2022.
India’s core industries, particularly steel and cement production, have maintained strong momentum, with India being the second-largest global producer in both sectors. The steel sector has witnessed significant growth driven by domestic demand from construction and manufacturing, while the cement industry remains a key player globally. Additionally, the coal industry in India achieved record production levels in FY25, showing a notable increase from the previous year.
The Chemicals and Petrochemicals sector, contributing 8.1% to the manufacturing sector’s GVA in FY24, continues to be a significant player in India’s industrial development. The automotive industry also recorded substantial growth in production during FY15-FY25, showcasing the sector’s resilience and potential for further expansion.
