India a bright spot in global manufacturing despite persistent geo-political tensions: Economic Survey
The global manufacturing landscape has undergone significant shifts over the past decade and India has been one of the dynamic economies that gained a greater presence in the space gradually vacated by developed countries.
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India remains a bright spot on the global manufacturing map despite persistent geopolitical tensions, aggressive industrial and trade policies, supply chain disruptions and global trade slowdown, and fostering R&D investments, and innovations enhancing the growth and formalisation of smaller manufacturers will further drive growth across various sectors, the Economic Survey 2024-25 said on Friday.
The global manufacturing landscape has undergone significant shifts over the past decade and India has been one of the dynamic economies that gained a greater presence in the space gradually vacated by developed countries.
With 2.8 per cent of the global share in manufacturing, compared to China's 28.8 per cent, India has a large opportunity to climb up the ladder. The country also has a substantial scope to improve the contribution of the industrial sector in GDP in relation to its comparator countries.
"It is more so in the light of the IMF's observation that manufacturing production is increasingly shifting towards emerging market economies, particularly China and India. India stands a good chance of benefitting from the trends in global industrial diversification," according to the Survey.
In India, the industrial growth in FY25 is expected higher than the previous five-year average. The industrial sector grew by 6.2 per cent in FY25, driven by robust growth in electricity and construction.
According to the Survey, industries such as steel, cement, chemicals, and petrochemicals have stabilised industrial growth, while consumer-focused sectors like automobiles, electronics, and pharmaceuticals have emerged as growth drivers for the country.
Currently, India is the second largest cement producer in the world after China. In April-November of FY25, the country's crude steel and finished steel production registered a growth of 3.3 per cent and 4.6 per cent.
The Indian automobile industry is a significant driver of economic growth, offering a diverse range of domestically produced vehicles. In FY24, the industry recorded domestic sales growth of 12.5 per cent. Recognising the sector's potential, the government has extended the PLI Scheme by one year.
According to the Economic Survey, state-level analysis indicates that business reforms in states are likely to foster industrial development.
"Achieving India's ambition of becoming a strong manufacturing power necessitates sustained and coordinated efforts from all tiers of government, the private sector, the skilling ecosystem, academia and R&D institutions," the Survey document suggested.
In a rather unsupportive global environment, it calls for lasting, coordinated efforts from all tiers of government, the private sector, the skilling ecosystem, academia and R&D institutions, as well as financial stakeholders to enable India to realise its ambition as a manufacturing powerhouse, the Survey stressed.
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