Manufacturing Sector in India
India ranked 30th on WEF global manufacturing index in 2017-18.

Indian Manufacturing Industry Analysis

Latest update: August, 2018

  • Indian manufacturing sector’s Gross Value Added at basic prices based at current prices is expected at US$ 388.01 billion in 2017-18E.
  • Manufacturing sector is estimated to have grown at a CAGR of 4.34 per cent between FY12 and FY18.
  • The Wholesale Price Index, in respect of manufactured goods grew 4.4 per cent 2016-17.
  • Quarterly GVA at basic prices from manufacturing sector grew by 10.92 per cent in the third quarter of FY18.
Growth

Notes: FY – Indian Financial Year (April -March), E – Estimate, Exchange rate used is average for the Financial Year
Source: MOSPI, News Articles

  • The Index of Industrial Production (IIP) is prepared by the Central Statistics Office to measure the activity happening in three industrial sectors namely Mining, Manufacturing, and Electricity.
  • It is the benchmark index and serves as a proxy to gauge the growth of manufacturing in India since manufacturing alone has a weight of 77.63 per cent in the index.
  • The manufacturing component of the IIP recorded 4.4 per cent growth in FY17 and 8.7 per cent in January 2018.
  • The production levels are expected to pick up growth again as the Goods and Services Tax (GST) has finally been implemented.
Growth

Notes: FY18* - From April to January 2017-18
Source: Central Statistics Office

Last Updated: August, 2018

The Gross Value Added (GVA) from the manufacturing sector is estimated at US$ 390.84 billion in FY18PE. During 2017-18, Index of Industrial Production for manufacturing sector grew 4.50 per cent. India’s Index of Eight Core Industries advanced 4.2 per cent year-on-year during 2017-2018. Manufacturing sector PMI of India stood at 52.30 in July 2018 indicating an expansion in the manufacturing sector.

The electronic goods industry is one of the fastest growing industries and is expected to be worth US$ 400 billion by 2020. Government is working on an export-oriented policy for Electronic products. The idea behind this policy is to promote greater exports of electronics and drive larger investments by setting up port-based electronic manufacturing clusters. Also, Ministry of Electronics and Information Technology is going to come up with a new electronics manufacturing policy and is in process of setting up industry-specific groups.

The Government of India has been supportive towards this growth. It set up Electronic Hardware Technology Parks (EHTPs), Special Economic Zones (SEZs) and brought about a favourable climate for Foreign Direct Investment (FDI). The government has also increased liberalisation and relaxed tariffs to promote growth in the sector. In addition, it has given the nod to Modified Special Incentive Package Scheme (MSIPS) under which the central government will be offering up to US$ 1.7 billion in benefits to the electronics sector in next five years. Under the scheme, subsidy for investment in capital expenditure is provided to the extent of 20 per cent of investment in SEZs and 25 per cent of investment in non-SEZs.

The growing customer base and the increased penetration in consumer durables segment have provided enough scope for the growth of the Indian electronics sector. Also, digitisation of cable could lead to increased broadband penetration in the country and open up new avenues for companies in the electronics industry.

Note: PE – Provisional Estimate

Indian Manufacturing Sector in India Industry Report (August, 2018)

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Indian Manufacturing Sector in India Industry Report (July, 2018)

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Click to access the Manufacturing Sector in India Industry Archived Report

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