Govt schemes accelerate India’s manufacturing growth, attract global supply‑chain shifts: Report
New Delhi, Aug 24 (IANS) India’s manufacturing sector recorded double‑digit growth in 2025‑26 and continues to accelerate, emerging as one of the world’s fastest‑growing manufacturing hubs, driven by government schemes and rising private investment, a new report has said.
The report from Morocco-based publication Assahifa said structural reforms and flagship programmes such as Make in India, the Production Linked Incentive (PLI) scheme, PM Gati Shakti, the National Logistics Policy and improvements in ease of doing business have begun to translate into higher industrial output, investment and exports.
Global companies increasingly view India as a preferred production and sourcing destination, given its large domestic market, competitive workforce, policy stability, and an improving logistics ecosystem, the report said. Rising domestic demand and greater integration into global value chains are other factors accelerating the sector’s growth.
Flagship initiatives, including PM Gati Shakti, industrial corridor development, multimodal logistics parks, dedicated freight corridors, port modernisation, and expanded highway networks steadily reduce logistics costs and improve supply chain efficiency.
Meanwhile, reforms such as the Goods and Services Tax (GST), digital governance, labour law rationalisation, faster regulatory approvals, increased India’s appeal as a global manufacturing destination.
India’s expanding network of Free Trade Agreements (FTAs) could accelerate manufacturing-led exports, the report said, adding that ongoing negotiations with the European Union and the United Kingdom, will likely improve market access for Indian manufacturers and strengthen integration into global production networks.
The report cited industry body ASSOCHAM saying average annual manufacturing growth in 2016–19 was 3.44 per cent, below the global average of 4.39 per cent. After Covid-19 pandemic, between 2022 and 2025, India’s manufacturing growth accelerated to 4.15 per cent, while the global average slowed to 2.19 per cent.
The study highlighted a comparison with China, where average manufacturing growth fell from 6.79 per cent pre‑pandemic to ‑0.07 per cent in 2022–25, leaving it over two percentage points below the global benchmark.
“This reversal highlights shifting global manufacturing dynamics and presents India with an unprecedented opportunity to capture a larger share of international production and investment,” the report said.
Before the pandemic, only China, Mexico, and Russia recorded manufacturing growth above the global average.
After COVID-19 pandemic exposed the vulnerabilities of highly concentrated production networks, global companies diversifying supply chains away from traditional hubs now prefers India as a preferred destination.
“Multinational corporations have increasingly adopted strategies such as China+1, friendshoring, and nearshoring to diversify production across multiple countries and enhance supply chain resilience,” the publication said.
India’s unique strength lies in bandwidth to offer manufacturers a combination of production scale and long-term market potential.
—IANS
aar/pk