India's Manufacturing Surge: A Look Ahead to Robust Growth

India’s manufacturing sector is set for growth, bolstered by strong domestic demand and positive investment sentiment. The FICCI survey highlights robust production, buoyant orders, and optimistic investment plans despite challenges like rising costs and geopolitical tensions. Continued policy support is vital for sustaining this momentum.

India's manufacturing industry is on track for substantial growth, supported by robust domestic demand and an encouraging investment climate, as revealed in the FICCI Quarterly Survey for Q2 FY2025-26. The report highlights significant activity across eight key sectors including automotive, capital goods, and chemicals.

The survey underscores optimism spurred by a strong domestic market, with 83% of participants forecasting higher orders. This positive trend is enhanced by recent GST rate reductions. Average capacity utilization is around 75%, suggesting healthy economic activity, and more than half of the participants are planning investments or capacity expansions in the upcoming months.

While the sector faces challenges like geopolitical tensions and rising operational costs, especially in raw materials and labor, financial conditions remain supportive. Lending rates are attractive, and 81% of manufacturers have adequate access to funding. Hiring remains positive, with notable demand for skilled workers, urging collaboration on skill development initiatives.

(With inputs from agencies.)