Manufacturing at the core of India’s $35 trillion economy goal by 2047: Govt

Manufacturing has emerged as a central pillar in India’s journey towards becoming a USD 35 trillion economy by 2047, with reforms, sector-focused initiatives and resilient supply chains supporting this ambition, the Government of India said on Thursday. Recognising the sector’s strategic importance, the Union Budget 2026–27 has strengthened support for manufacturing through targeted measures aimed at boosting investment, fostering innovation, enhancing infrastructure and reinforcing the overall industrial ecosystem.

"Manufacturing today sits as the engine of growth for India’s ambition to become a $35 trillion economy by 2047, with reforms, sectoral initiatives, and resilient supply chains. Recognising this importance, the Union Budget 2026-27 has reinforced support for manufacturing through targeted measures focusing on investment incentives, innovation, infrastructure development, and industrial ecosystem strengthening," the statement read.

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Strategic alignment and global performance

The three established Kartavyas require the manufacturing industry to contribute essential support for three specific economic objectives, which include job creation, improved export capabilities and long-term structural development. At a time when global manufacturing output grew modestly by 0.7 per cent in the third quarter of calendar year 2025, India outperformed with a 1.3 per cent expansion during the same period, which showed strong domestic fundamentals and extended policy support.

Shift towards high-technology manufacturing

The Economic Survey 2025–26 noted that medium and high-technology industries now produce 46.3 per cent of India's manufacturing value added, which demonstrates an ongoing trend toward advanced production techniques. This transition positions India among a select group of middle-income economies that are moving up the global manufacturing value chain. India's industrial development progress shows through its Competitive Industrial Performance CIP index, which improved from 40th place in 2022 to 37th place in 2023.

Strong industrial growth momentum

The industrial sector maintains strong growth momentum as real Industry Gross Value Added (GVA) increased by 7 per cent during the first six months of fiscal year 2025–26. Industrial production achieved its highest growth rate in more than two years when December 2025 production rose by 7.8 per cent after November production had been revised to show 7.2 per cent growth. The manufacturing sector experienced a strong increase during December when it expanded by 8.1 per cent because computer and electronic products grew at 34.9 per cent, motor vehicles and trailers grew at 33.5 percent and other transport equipment grew at 25.1 per cent.

Accelerating manufacturing GVA growth

Manufacturing GVA growth stood at 7.72 per cent in Q1 and accelerated to 9.13 per cent in Q2 of FY 2025–26, supported by a gradual shift towards higher-value production, improved industrial infrastructure, greater technology adoption and increased formalisation.

Union Budget 2026–27: Measures to accelerate growth

The Union Budget 2026-27 introduced extensive initiatives which aim to drive economic development by establishing manufacturing operations within essential and emerging industrial sectors.

The government announcement extends its existing agenda through its new initiatives, which serve immediate requirements for tax relief and customs reform, while developing long-term capabilities through industrial missions and cluster schemes.

With agency inputs