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Economic Survey expects India’s industrial sector to grow by 6.2% in FY25
Industry News- Feb 01,25
Consumer-focused sectors like automobiles, electronics, and pharmaceuticals have emerged as growth drivers. Domestic production of electronic goods shows remarkable growth of CAGR of 17.5 per cent from FY15 to FY24.
The industrial sector in India is expected to grow by 6.2 per cent in FY-25, according to the first advance estimates of GDP presented in the Economic Survey 2024-25 by Union Minister of Finance, Nirmala Sitharaman. This growth is driven by robust performance in electricity and construction, and the Survey highlights that fostering R&D investments, encouraging innovations, and formalizing smaller manufacturers will be key to sustained growth across various sectors.
The Survey also identifies consumer-driven industries such as automobiles, electronics, and pharmaceuticals as significant growth drivers. With India accounting for 2.8 per cent of global manufacturing and witnessing a shift in manufacturing production to emerging economies like India and China, the country stands well-positioned to benefit from global industrial diversification trends.
Key updates on core input industries include:
- Cement: India remains the second-largest cement producer globally, after China. Government initiatives focusing on mega infrastructure projects like highways, railways, and housing schemes, alongside rural development and industrial growth, are expected to stimulate cement demand.
- Steel: In FY25 (April-November), crude steel and finished steel production grew by 3.3 per cent and 4.6 per cent, respectively. This growth is driven by public infrastructure spending and ongoing development projects. Government efforts in housing and infrastructure have contributed significantly to rising demand.
- Capital Goods: The government is promoting Smart Manufacturing and Industry 4.0, establishing Smart Advanced Manufacturing and Rapid Transformation Hub (SAMARTH) Udyog centres to support innovation in the sector.
- Automobiles: In FY24, the domestic automobile industry saw a 12.5 per cent growth in sales. To further capitalize on this potential, the government has extended the PLI Scheme for the sector by one year.
- Electronics: India’s domestic electronics production has surged from ?1.90 lakh crore in FY15 to ?9.52 lakh crore in FY24, growing at a CAGR of 17.5 per cent. The growth has been supported by initiatives like Make in India and Digital India, along with improved infrastructure, business ease, and foreign investment.
- Textiles: As a major employment generator, the textile industry accounts for around 11 per cent of India’s manufacturing GVA. India is a global leader in jute production and ranks second worldwide in cotton, silk, and man-made fibre production.
- Pharmaceuticals: The Indian pharmaceutical sector is the third-largest globally by volume, with a diverse portfolio of generic drugs, vaccines, and biosimilars. The industry’s turnover reached ?4.17 lakh crore in FY24, growing at an average annual rate of 10.1 per cent over the past five years. The medical devices sector is also growing rapidly, with a CAGR of approximately 15 per cent.
The Survey also highlights India’s strengthening intellectual property ecosystem. According to the WIPO Report 2022, India ranks sixth among the top patent filing offices globally. Reforms like the Patent (Amendment) Rules 2024 have simplified patent processes, boosting innovation and R&D.
The Economic Survey concludes by stressing the need for collaborative efforts across government tiers, the private sector, academia, and financial stakeholders to realize India's ambition of becoming a global manufacturing powerhouse.
(Image Courtesy: FreePik.com)
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