What's next for the manufacturing industry in 2025?

Industry opinion on the year ahead in manufacturing.

India’s manufacturing sector is the cornerstone of the country’s economic growth, contributing 17% to the GDP and providing jobs for over 27 million people. In FY 2022-23, the sector experienced a robust growth rate of 21.5%, driven by key industries such as basic metals, petroleum products, food, chemicals, and motor vehicles, which together accounted for 58% of total manufacturing output. Employment surged with the creation of 22 lakh new jobs, surpassing pre-pandemic levels. Maharashtra, Gujarat, Tamil Nadu, Karnataka, and Uttar Pradesh are the primary drivers of this growth.

The future of India’s manufacturing sector looks promising. The National Manufacturing Policy aims to raise its contribution to 25% of GDP by 2025, with projections suggesting a rise to 27% by 2047. By 2030, India is expected to become a global manufacturing hub, with exports reaching US$ 1 trillion. Despite these optimistic projections, the sector faces challenges such as inadequate infrastructure, a shortage of skilled labour, regulatory complexities, and limited access to finance. Global competition, especially from China, further complicates matters. The adoption of advanced manufacturing technologies is still lagging, and environmental concerns necessitate urgent attention to ensure long-term sustainability.

To address these challenges, key recommendations include expanding the Production-Linked Incentive (PLI) Scheme to cover more labour-intensive sectors, increasing female workforce participation, and focusing on the needs of MSMEs, which constitute 45% of India’s manufacturing GDP. Investment in infrastructure, skill development, and simplifying regulatory processes will be crucial for sustained growth. Additionally, promoting digital technologies and sustainable manufacturing practices will be vital to improving productivity and competitiveness.