Every great economy has a story of factories at its core and for India, that story is rapidly unfolding. Over the past few years, manufacturing has increasingly emerged as a central pillar of the nation’s growth model, not just meeting domestic demand but also strengthening India’s position in global value chains.
The Index of Industrial Production (IIP), which tracks the volume of output across manufacturing, mining, and electricity, is a snapshot of how industry is performing and its contribution to GDP growth. In July 2025, the IIP recorded a growth of 3.5% year-on-year, rising significantly from 1.5% in June 2025. Manufacturing growth also grew by 5.40% in July 2025 year-on-year, up from 3.7% of June 2025.
India’s growth story is increasingly powered by the hum of modern factory floors. From Electronics Manufacturing Cluster (EMC) in Pune, to laptop assembly line in Chennai, it reflects the spread of industrial activity across regions. Behind the scenes, policies like PLI, National Manufacturing Mission and others are turning these hubs into high-performance nodes.
With global supply chains shifting and India’s domestic market expanding, the sector is well positioned to play a pivotal role in driving and sustaining overall growth.
Within the manufacturing sector, out of 23 industry groups, 14 recorded YoY growth in July 2025. Leading performers include basic metals at 12.7%, electrical equipment at 15.9%, and other non-metallic mineral products at 9.5%. The growth in IIP in July, 2025 was driven largely by manufacturing, underscoring rising demand and stronger capacity utilization across industries.
The momentum was also mirrored in the HSBC India Manufacturing Purchasing Managers’ Index (PMI) for manufacturing. In June 2025, PMI stood at 58.4, climbing to 59.1 in July—its highest in 16 months—before inching up further to 59.3 in August. This latest reading signalled the fastest improvement in operating conditions in over 17 years.
The uptick was driven by a sharp acceleration in production volumes—the quickest pace in nearly five years—alongside robust growth in new factory orders. Companies responded by scaling up input purchases and expanding their workforce, underscoring confidence in the sector’s near-term prospects.
The IIP’s uptick reflects India’s broader industrial ambition. By 2047, in the Amrit Kaal of independence, the goal is not just participation but leadership in global manufacturing, creating millions of jobs, and boosting exports. Together, these indicators show a clear trajectory: India is laying the foundation for its economic growth, with manufacturing at its core.
Source: PIB