India’s manufacturing growth rose to 4.15% in 2022–2025, up from 3.44% in 2016–2019, outperforming the global average by 1.96 percentage points. A new ASSOCHAM study links this gain to China+1 strategies, PLI schemes, PM Gati Shakti infrastructure, and industrial corridor development. China’s relative position slipped from +2.40 to −2.26 percentage points versus the global benchmark. The report covers the world’s top 10 manufacturing economies — 65% of global output — and identifies logistics upgrades, supplier ecosystem development, and Industry 4.0 adoption as key next steps.
According to businessworld.in, India’s manufacturing growth accelerated to 4.15% during the 2022–2025 period — up from 3.44% in 2016–2019 — as multinational firms execute China+1 and nearshoring strategies to rebuild resilient global supply chains.
Outperformance Against Global Benchmark
A study by ASSOCHAM titled Global Manufacturing Undergoing Strategic Realignment: India Emerges as a Key Beneficiary of Supply Chain Diversification found that India moved from 0.95 percentage points below the global manufacturing growth average in 2016–2019 to 1.96 percentage points above it in 2022–2025. In contrast, China’s position relative to the global average declined from 2.40 percentage points above to 2.26 percentage points below the benchmark over the same timeframe.
The analysis covered the world’s 10 largest manufacturing economies — collectively responsible for nearly 65% of global manufacturing output — and classified India among the “Emerging Manufacturing Leaders.” While the global average manufacturing growth fell to 2.19% in the post-pandemic period (2022–2025), down from 4.39% pre-pandemic (2016–2019), India’s upward trajectory reflects structural improvements in policy, infrastructure, and investor sentiment.
Drivers Behind the Acceleration
The report attributes India’s gains to multiple converging factors: expanding domestic demand, infrastructure development under PM Gati Shakti, industrial corridor expansion, and targeted government incentives — notably the Production Linked Incentive (PLI) schemes. These initiatives have strengthened logistics efficiency and elevated investor confidence, particularly under the China+1 strategy.
According to Nirmal K Minda, President of ASSOCHAM, “The global manufacturing landscape is undergoing a gradual but important shift. Companies are no longer looking at efficiency alone; they are equally focused on resilience and diversification. India’s improving manufacturing performance reflects the impact of sustained reforms and growing investor confidence.”
- Logistics and industrial infrastructure acceleration
- Strengthening of domestic supplier ecosystems
- Enhancement of ease of doing business
- Promotion of Industry 4.0 technologies
- Leveraging free trade agreements to deepen integration with global value chains
Strategic Priorities for Sustained Growth
Minda emphasized that the next phase must prioritize implementation, scale, and ecosystem building — moving beyond policy design to execution excellence. He urged focus on creating globally competitive manufacturing clusters capable of anchoring India more deeply within international supply networks.
The report recommends accelerating investments in multimodal connectivity, upgrading port and rail capacity, incentivizing Tier-2 and Tier-3 city industrialization, and aligning skill development with advanced manufacturing needs. It also highlights the importance of integrating small and medium enterprises (MSMEs) into formal supply chains — a priority given MSMEs contribute over 30% of India’s GDP and employ more than 110 million people.
Industry practitioners note that while PLI schemes have drawn over $24 billion in committed private investment across sectors including electronics, pharmaceuticals, and solar PV, consistent execution timelines, land acquisition clarity, and state-level regulatory harmonization remain critical bottlenecks affecting time-to-market for new facilities.
Source: businessworld.in
Compiled from international media by the SCI.AI editorial team.
