As India celebrates its 80th Independence Day, the manufacturing sector has emerged as a key driver of economic growth, industrial resilience, and self-reliance. Driven by the Make in India vision and supported by reforms such as the Production Linked Incentive (PLI) scheme, PM GatiShakti, the National Logistics Policy, BHAVYA, and targeted initiatives for electronics and MSMEs, the country has steadily strengthened its position as a leading global manufacturing destination, according to PIB.
PM GatiShakti and the National Logistics Policy have also contributed to better infrastructural integration, multimodal connectivity, and logistics efficiency, making Indian manufacturing more competitive.
Manufacturing now accounts for between 16 and 17 percent of India’s GDP and employs over 27 million people. Manufacturing Gross Value Added grew at a 10.88% CAGR between 2022-23 and 2025-26, while manufacturing production increased by 7.8% in June 2026.
In July 2026, merchandise exports reached ₹3.76 lakh crore ($44.24 billion), up from over ₹3.14 lakh crore ($36.98 billion) the previous year. This highlights the sector’s significant contribution to national prosperity.
Over the last decade, India’s defense industry sector has changed dramatically. In FY 2025-26, indigenous defense output hit a record ₹1.78 lakh crore, up 15.6% from the previous year and significantly more than ₹46,429 crore in FY 2014-15.
Exports increased from ₹686 crore in FY 2013-14 to ₹38,424 crore in FY 2025-26. Indian-made defense items now reach more than 80 nations worldwide, with a growth rate of nearly 5,500% over the past 12 years.Defense Policy Briefs
In FY 2025-26, public sector undertakings accounted for around 76% of defense output, while the private sector’s contribution grew to 24%, indicating growing private engagement. By May 2026, ten Positive Indigenization Lists totaling 5,521 items had been notified, advancing self-reliance. The Srijan Defense Equipment Empowerment Platform now serves over 41,000 vendors and about 2.7 lakh goods, thereby bolstering domestic defense supply chains.
Electronics manufacturing has emerged as one of the most dynamic areas of the economy. Electronics output rose from ₹11.32 lakh crore in FY 2024-25 to ₹13.11 lakh crore in FY 2025-26, representing a 15.8% annual growth rate.Defense Industry
Since FY 2014-15, electronics output has increased from ₹1.9 lakh crore to ₹13.11 lakh crore, with exports increasing from ₹38,000 crore to ₹4.24 lakh crore. Mobile phone production increased from around ₹18,000 crore to ₹6.27 lakh crore, while exports increased from about ₹1,500 crore to ₹2.59 lakh crore.
India’s semiconductor ambitions have gained significant speed. The Semicon India Program 1.0, approved in 2021 with an outlay of ₹76,000 crore, established a domestic semiconductor ecosystem.
In July 2026, SEMICON 2.0 received approval with a budget of ₹1.28 lakh crore, building on previous efforts. Twelve industrial projects costing over ₹1.64 lakh crore have been approved. These include silicon and silicon carbide fabrication, gallium nitride Micro LED display manufacturing, and advanced packaging facilities.
Three approved businesses, Micron, Kaynes, and CG Semi, have already begun commercial production, with another site set to open in 2026. These projects are designed to benefit industries ranging from consumer electronics and telecommunications to vehicles, airplanes, and industrial manufacturing.
India’s mobile manufacturing success story is accelerating. Nearly 99.2% of mobile phones sold domestically are currently made in the country, making it the world’s second-largest mobile phone maker in terms of volume. Since 2014, India has gone from being a net importer to a net exporter of mobile phones, with smartphones being the country’s largest individual export item in fiscal year 2025-26, overtaking petroleum products and gems and jewelry.
The PLI plan for Large Scale Electronic Manufacturing has attracted investments of approximately ₹96,000 crore, with domestic value addition reaching 23% in FY 2023-24. The new Mobile Phone Manufacturing Scheme, authorized in July 2026, allocates ₹62,500 crore from FY 2026-27 to FY 2030-31. It provides incentives ranging from 2.25% to 5%, as well as support for local sourcing, Indian brands, design capabilities, and R&D.Geographic Reference
India’s pharmaceutical sector remains one of the world’s leading healthcare suppliers. The country is ranked third in the world by volume and eleventh in terms of value, supplying approximately 20% of global generic medications and a significant share of vaccines. The sector had a turnover of ₹4.72 lakh crore in 2024-25.
Three pharmaceutical PLI programs with a combined allocation of ₹25,360 crore have drawn investments surpassing ₹51,997 crore, resulting in cumulative sales of ₹3.88 lakh crore, including exports of more than ₹2.43 lakh crore.
Manufacturing capabilities have been built for 218 APIs, important starting materials, and drug intermediates, as well as 57 medical devices such as MRI systems, CT scanners, ultrasound equipment, and crucial implants.
Textiles and clothing continue to play an important role in industry development and job creation. The sector provides over 45 million jobs, making it the second largest employer behind agriculture. Strong raw material availability, integrated value chains, and leadership in cotton production and yarn exports provide India a considerable competitive edge.
The textiles sector accounts for around 2% of GDP, 11% of manufacturing GVA, and 9% of goods exports.
In FY 2025, India’s textile and apparel exports were $37.7 billion (roughly ₹3.20 lakh crore), representing 4.1% of global exports and ranking as the world’s sixth-largest exporter. PM MITRA Parks, the National Technical Textiles Mission, the Textiles Export Promotion Mission, the National Fiber Mission, and the Cotton Productivity Mission are among the government measures planned to boost competitiveness.
The maritime manufacturing sector also receives significant policy support. A ₹69,725 crore package launched in 2025 intends to increase shipbuilding capacity, maritime finance, and workforce development. The Shipbuilding Development Scheme has earmarked ₹19,989 crore to increase yearly shipbuilding capacity to 4.5 million gross tons.
Greenfield shipbuilding clusters are planned in Andhra Pradesh, Gujarat, and Tamil Nadu, while existing shipyards can apply for capital assistance to modernize facilities and expand operations. The ₹25,000 crore Maritime Development Fund comprises a ₹20,000 crore Maritime Investment Fund and a ₹5,000 crore Interest Incentivization Fund for long-term sector funding.
The Shipbuilding Financial Assistance Scheme will provide an additional ₹24,736 crore. The Container production Assistance Scheme, funded by the Union Budget 2026-27 at ₹10,000 crore over five years, aims to increase annual container production capacity to 7.5 lakh TEUs, approximately ten times current levels. In July 2026, India debuted its first domestically made EXIM shipping container for A.P. Moller-Maersk in Dadri, Uttar Pradesh.Geographic Reference
India’s automobile sector is one of the world’s strongest. The country is the world’s largest market for two- and three-wheelers, as well as the third-largest for passenger and commercial vehicles. The sector directly and indirectly supports over 30 million jobs.
Vehicle production rose from 22.65 million units in FY 2020-21 to 31.03 million units in FY 2024-25, while overall output increased by over 33% between FY 2014-15 and FY 2024-25. The Automobile and Auto Components PLI project, allocated ₹25,938 crore, garnered investments of ₹44,326 crore by March 2026 and created 67,820 employment.
The PM E-DRIVE initiative, worth ₹10,900 crore, has significantly increased the use of electric vehicles. The plan aims to provide incentives for about 28.30 lakh electric vehicles, which include two- and three-wheelers, busses, ambulances, and trucks. Funding has been given for 14,028 electric busses, with 14,000 already deployed, and ₹2,000 crore for public charging infrastructure.
Solar module manufacturing capacity listed on the Approved List of Models and Manufacturers is expected to reach 100 GW by August 2025, up from around 2.3 GW in 2014. Solar cell production capacity has expanded from less than 1.2 GW to 25 GW by March 2025. The government’s high-efficiency solar PV module PLI initiative, worth ₹24,000 crore in two phases, has awarded 48 GW of integrated PV manufacturing capacity. Solar PV shipments in FY 2024-25 were eight times greater than in FY 2017-18.
Taken together, these advances demonstrate India’s ongoing increase of industrial capabilities in defense, electronics, semiconductors, pharmaceuticals, textiles, maritime industries, autos, and renewable energy.
With persistent policy support, infrastructural upgrades, investment inflows, and increased private-sector participation, the country is repositioning itself as a globally competitive manufacturing powerhouse while working toward a stronger and more self-sufficient economy.
