India's Industrial Growth Soars, Survey Calls for Strategic Resilience

The Survey points to the vital aspect of the next phase of industrialisation that will require a calibrated shift from a model centred mainly on import substitution towards one focused on scale, competitiveness, innovation and deeper integration into GVCs.

"Rather than seeking complete self-reliance in every segment, India needs to build strategic resilience through diversification and creating depth of capabilities. This requires an increase in private sector investment in R&D, technology adoption, skills, and quality systems," said the Survey.

The Economic Survey notes that manufacturing GVA grew by 7.72 per cent and 9.13 per cent in Q1 and Q2 of FY26, respectively, primarily driven by ongoing structural shifts within the sector.

"India's industrial performance remains robust as Industry Gross Value Added (GVA) grew by 7.0 per cent year-on-year, in real terms, in the first half of FY2025-26, marking a clear pickup after growth had eased to 5.9 per cent in the previous fiscal year (FY2024-25)," said the Survey tabled in Parliament by Finance Minister Nirmala Sitharaman.

These include a gradual move toward higher-value manufacturing segments, improved availability of industrial infrastructure through corridor-led development, and greater adoption of technology and formalisation across firms.

Medium and high-technology activities now account for 46.3 per cent of India's total manufacturing value added.

"This is attributed to various government initiatives such as the Production Linked Incentive (PLI) schemes and the India Semiconductor Mission, alongside the strengthening of domestic capacities in electronics, pharmaceuticals, chemicals and transportation sectors," said the Survey.

It further states that India's global standing has strengthened, as its ranking in terms of Competitive Industrial Performance (CIP) improved to 37th in 2023, up from 40th position in 2022.

Notably, core industries maintained strong momentum, with India remaining the second-largest global producer of steel and cement.

India is the second-largest cement producer in the world after China. Domestic cement consumption in India is approximately 290 kg per capita, compared to a global average of 540 kg per capita. The Steel sector has undergone a major transformation in the last five years, largely driven by strong domestic demand from the construction and manufacturing sectors.

Moreover, the coal industry reached historic heights in FY25, producing 1,047.52 Million Tonnes (MT) of coal -- a 4.98 per cent increase from the previous year's 997.83 MT.

The Chemicals and Petrochemicals sector continues to play a significant role in the industrial development of the economy. The sector contributed 8.1 per cent to the overall manufacturing sector's GVA in FY24. Meanwhile, the automotive industry recorded nearly 33 per cent growth in production during FY15-FY25.

- IANS