India’s manufacturing sector displayed sustained growth and increasing positivity in the fourth quarter of fiscal year 2026, despite a rise in input costs, as per a report by FICCI. The report highlighted that 93% of respondents noted higher or steady production levels, up from 91% in the previous quarter. Moreover, 89% of participants anticipated a rise or stability in domestic demand during the same period.
The survey encompassed responses from both large and MSME manufacturers across eight key sectors, collectively holding an annual turnover exceeding Rs. 8 lakh crore. It reflected a general optimism and robust domestic fundamentals supporting the growth of the manufacturing industry. Capacity utilization averaged around 72%, varying across sectors from approximately 65% in miscellaneous categories to about 76.4% in textiles, apparels, and technical textiles.
Looking ahead, the report indicated a consistent outlook for future investments over the next six months. Notably, 86% of respondents expected their inventory levels to increase or remain the same in Q4 FY26, compared to 89% in the preceding quarter. Additionally, 80% of participants anticipated higher or stable exports in the fourth quarter, a slight increase from the 74% reported in the third quarter of FY26.
Hiring intentions also showed a modest improvement, with 41% of respondents planning to recruit new staff in the upcoming three months, up from 38% in the previous quarter. However, concerns were raised regarding escalating production costs, with nearly 70% of firms witnessing a surge in production expenses as a percentage of sales, attributed to elevated raw material prices, currency devaluation, and increased logistics, power, and utility costs.
While 79% of respondents expressed no challenges with workforce availability, 21% highlighted a shortage of skilled workers in their respective sectors.
