sb.scorecardresearch

Updated 14:32 IST, January 31st 2025

Economic Survey 2025: India's Manufacturing Growth Faces Global Challenges But Has Potential for Expansion

The survey claims that while industries like steel, cement, and chemicals have stabilized, automobiles, electronics, and pharmaceuticals sectors are growing.

Reported by: Business Desk
Follow: Google News Icon
  • share
Union Budget vs Interim Budget
Union Budget vs Interim Budget | Image: Republic

Recent geopolitical tensions, trade policies, supply chain disruptions, and a global trade slowdown have impacted India's export demand,  as per the Economic Survey 2024-25. 
"There have been serious challenges to global manufacturing in terms of persistent geopolitical tensions, aggressive industrial and trade policies, supply chain disruptions, and global trade slowdown. This has posed a challenge to export demand for India’s manufactured products," pointed out the Economic Survey. 

The survey claims that while industries like steel, cement, and chemicals have stabilized, sectors such as automobiles, electronics, and pharmaceuticals are driving growth.
It also stated that India has made significant strides in global manufacturing over the past decade, gaining marketshare as developed countries have reduced their presence. Key to this growth has been investments in public capital and logistics improvements. 

Scope for growth

The latest Economic Survey revealed that India holds 2.8 percent of global manufacturing, far behind China’s 28.8 percent, but has the potential to increase its share. The country’s industrial sector also has room for growth in relation to its peers. 

"In the global manufacturing space, high-income countries have lost a significant part of their share during the last decade. The share of lower middle-income economies did not, in general, increase. Yet, India managed to improve its share in the pie and global presence.  However, with 2.8 per cent of the global share in manufacturing, compared to China’s 28.8 per cent, India has a large opportunity to climb up the ladder," as stated in the survey. 

Impending challenges

The Survey also stated that global challenges such as rising commodity prices, political instability, and increased logistics costs threaten the manufacturing sector. Despite these challenges, India has opportunities to capitalize on global shifts toward emerging market economies, the survey claimed. 

The survey stated that achieving manufacturing power requires coordinated efforts from all sectors, including government, private industry, and research institutions.

Published 14:13 IST, January 31st 2025