New Delhi: India’s industrial sector continues to show strong growth despite a difficult global environment, according to the Economic Survey 2025-26 tabled in Parliament. The Survey said that reforms in infrastructure, logistics, ease of doing business, and innovation systems have helped industry remain on a steady growth path.
It added that India’s next phase of industrialisation must move beyond a focus only on import substitution and instead aim for larger scale, better competitiveness, higher innovation, and deeper integration with global value chains.
Shift towards strategic resilience
The Survey stressed that India should not try to become fully self-reliant in every sector. Instead, it should build strategic resilience by diversifying its industrial base and strengthening capabilities.
This means increasing private sector investment in research and development, adopting new technologies, improving workforce skills, and upgrading quality systems. These steps will help Indian industries remain competitive in global markets.
Manufacturing growth picks up
The Survey highlighted that manufacturing activity remains strong. Manufacturing Gross Value Added (GVA) grew 7.72 percent in Q1 and 9.13 percent in Q2 of FY26, driven by structural changes within the sector.
Overall, industry GVA grew 7.0 percent year-on-year in the first half of FY26, compared with 5.9 percent growth in FY25, showing a clear improvement in performance.
This growth is supported by better infrastructure through industrial corridors, higher use of technology, and greater formalisation of businesses.
Rise in high-value manufacturing
Medium and high-technology industries now account for 46.3 percent of India’s total manufacturing value added, showing a gradual shift towards more advanced manufacturing.
The Survey said this progress is linked to government initiatives such as the Production Linked Incentive (PLI) schemes and the India Semiconductor Mission. These policies have strengthened domestic capacity in key sectors like electronics, pharmaceuticals, chemicals, and transport equipment.
India’s global ranking improves
India’s global position has also improved. Its ranking in Competitive Industrial Performance (CIP) rose to 37th in 2023, up from 40th in 2022, reflecting better industrial competitiveness.
Core industries remain strong
The Survey noted that core industries continue to perform well. India remains the second-largest producer of steel and cement globally. Cement consumption in India is about 290 kg per capita, much lower than the global average of 540 kg, indicating strong future growth potential.
The steel sector has seen major transformation over the past five years, driven by demand from construction and manufacturing. Coal production also hit a record 1,047.5 million tonnes in FY25, nearly 5 percent higher than the previous year.
The chemicals and petrochemicals sector contributed 8.1 percent to manufacturing GVA, while the automotive sector recorded nearly 33 percent growth in production over the last decade.
