India's Manufacturing Dynamics: Achievements and Regulations

Current Condition of India’s Manufacturing Industry

India's manufacturing exports are increasing consistently, with overall exports up 6.18% year-over-year to US$ 349.35 billion during April-August 2025.

Merchandise exports increased by 2.52% to reach US$ 184.13 billion.

The industry is set to achieve US$ 1 trillion by FY26 and may contribute US$ 500 billion each year to the global economy by 2030.

Motors of Expansion: Industries in Flux

Electronics: Over the last 11 years, India's electronics manufacturing industry has experienced a sixfold increase in production and an eightfold growth in exports. The added value of electronics has risen from 30% to 70%, aiming to achieve 90% by FY27.

Mobile production grew from 2 to 300 units, with exports increasing 127-fold. Import reliance decreased from 75% to 0.02%, establishing India as the world's second-largest mobile producer.

Pharma: India's pharmaceutical sector is a global leader, standing 3rd worldwide by volume and 14th in production value, providing more than 50% of the worldwide vaccine demand and almost 40% of generics to the US.

The sector is anticipated to reach USD 130 billion by 2030 and the US$ 450 billion market by 2047.

It is supported by policy initiatives for Pharmaceuticals such as the PLI scheme (₹15,000 crore) and the Strengthening of Pharmaceuticals Industry (SPI) scheme (₹500 crore).

Automobiles: India’s car sector plays a crucial role in the economy, accounting for 7.1% of GDP and 49% of manufacturing GDP. In FY25, more than 3.10 crore vehicles were manufactured, positioning India as the fourth-largest automobile producer globally with significant potential to dominate the international automotive value chain.

Textiles: India's textile and clothing sector, among the largest in the world, adds 2.3% to GDP, 13% to industrial output, and 12% to exports.

It is estimated to reach US$ 350 billion by 2030, generating 3.5 crore employment opportunities.

Significance of India’s manufacturing industry

India has emerged as a leading choice for international investors thanks to ongoing reforms, streamlined regulations, and a stable policy landscape.

Maharashtra topped with 39% of inflows, trailed by Karnataka and Delhi.

Singapore, Mauritius, and the United States were the leading sources of FDI.

The manufacturing industry is emerging as a major catalyst for economic growth, enhancing domestic demand and its significance in global supply chains.

Manufacturing in India plays a significant role in generating employment, particularly for skilled and semi-skilled labor.

Recent statistics indicate an increasing workforce participation rate, especially among women, with the Worker Population Ratio at 52.2% and a consistent improvement in female involvement.

Unemployment rates have declined, indicating widespread and inclusive job growth.

Procedures and Guidelines

India is propelling its upcoming manufacturing boom with aligned policies spanning manufacturing, logistics, urban growth, and entrepreneurship, backed by key initiatives that enhance investment, innovation, and employment generation.

The GST 2.0 reforms have streamlined tax categories and decreased rates on essential products, cutting expenses for both manufacturers and consumers, aiding MSMEs, improving supply chain efficiency, and invigorating industries such as automotive and textiles.

The National Manufacturing Mission (NMM), introduced in the Budget for 2025-26, provides a cohesive, cross-ministerial framework targeting sustainable, clean technology industrial advancement in line with India’s net-zero objectives, with the goal of enhancing India’s global manufacturing position.

The Production Linked Incentive (PLI) Scheme, featuring a ₹1.97 lakh crore budget, promotes 14 crucial sectors such as electronics, pharmaceuticals, and solar energy, fostering export surpluses, unprecedented smartphone exports, robust investments, and employment opportunities.

The National Logistics Policy (NLP) aims to decrease logistics expenses and enhance efficiency by 2030, incorporating digital solutions, multi-modal connectivity, and infrastructure such as logistics parks, in line with the PM GatiShakti master plan.

Startup India has nurtured the nation’s third-largest startup environment with 1.91 lakh approved startups generating more than 17.69 lakh jobs, driving innovation and economic development.