Indian manufacturing projected to reach $ one trillion by 2025-26

The latest report by Colliers projects that India's manufacturing market is poised to reach $one trillion by 2025-26, with Gujarat becoming the country’s manufacturing powerhouse, followed by Maharashtra and Tamil Nadu. It has been seen that the sector is witnessing an influx of capital investment and increased merger and acquisition activity. The manufacturing Gross Value Added (GVA) at current prices reached an estimated $ 110.48 billion in the first quarter of FY24. High investment has been witnessed in the automobile, electronics and textile sectors, which show all hold immense growth prospects. Supported by robust physical and digital infrastructure, the manufacturing sector that is expected to grow to 21% in the next six to seven years, contributes around 17% to the GDP. India is well-positioned to enhance further making considerable advances in global supply chains. The automotive sector, a keystone of India's manufacturing prowess, has drawn enthusiastic interest from global players like Tesla and Ford, depicting intents for establishing or expanding their manufacturing footprints here.

Electronics manufacturing experienced a rise in investments, particularly in the smartphone production domain. Major players like Apple's contract manufacturers established assembly units, implying a shift to local production strategies, aligning with India's competitive advantages. Additionally, the textiles and garment manufacturing sectors have witnessed an upsurge in investment activities, with several global brands reconsidering their sourcing strategies and investing in Indian textile units, take advantage of the country’s competitive advantages in the said domain. Many MoUs have been signed but then many Indian states boast of industrial and manufacturing sectors. The Maharashtra government has signed 21 MoUs to the tune of Rs. 88,420 crore at the World Economic Forum in 2023. The MoU has employment potential of over 55,000 jobs. The MoU conversion rate in Maharashtra is 30- 40%. Andhra Pradesh signed MoUs in the global submit 2023 with 352 firms. Once launched successfully, these projects will create six lakh jobs within the state.

In addition to this, Gujarat signed three MoUs in October 2023 worth Rs. 3,000 crore for textile, industrial park, engineering, including auto sector, which can create 9,000 employment opportunities. Tamil Nadu has signed 79 MoUs in year 2022-23 that makes for an overall Rs. 165,748 crore investment. While India looks set to make ground in the electronics equipment market, this is unlikely to include semiconductors, and a 10% increase in output in the sector still represents less than 0.5% overall in terms of the total manufacturing output. The country has a robust metal industry, led by global giant Tata Steel, and, looking at the MIO, there is certainly room to grow in sectors like chemical and pharmaceutical industry. The Colliers report notes that among emerging sectors, semiconductors, agri tech and waste management look most promising. Within waste management, e-waste is particularly garnering attention. Advanced technologies, sustainable practices, Industry 4.0, local manufacturing focus, AI integration, 3D printing adoption and IoT-driven processes are among emerging themes in India's manufacturing sector.