Indian Manufacturing Sector – Industry Report
Manufacturing has emerged as one of the high growth sectors in India. Prime Minister of India, Mr Narendra Modi, launched the ‘Make in India’ program to place India on the world map as a manufacturing hub and give global recognition to the Indian economy. Government aims to create 100 million new jobs in the sector by 2022.
India’s gross domestic product (GDP) at current prices stood at Rs. 51.23 lakh crore (US$ 694.93 billion) in the first quarter of FY22, as per the provisional estimates of gross domestic product for the first quarter of 2021-22. The manufacturing GVA at current prices was estimated at US$ 97.41 billion in the first quarter of FY22.
India has potential to become a global manufacturing hub and by 2030, it can add more than US$ 500 billion annually to the global economy.
The IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) stood at 55.9 in October 2021.
As per the survey conducted by the Federation of Indian Chambers of Commerce and Industry (FICCI), capacity utilisation in India’s manufacturing sector stood at 72.0% in the second quarter of FY22, indicating significant recovery in the sector.
The overall index stood at 134.0, as of July 2021. This rise in the index was supported by growth in production of natural gas, steel, cement, fertilisers, coal, refinery products and electricity.
In July 2021, natural gas output increased by 18.9%, coal (18.7%), petroleum refinery production (6.7%), fertilisers (0.5%), steel (9.3%), cement (21.8%) and electricity (9.0%).
In September 2021, the manufacturing component of IIP stood at 129.9
Merchandise exports from select industries (including engineering, petroleum products, gems & jewellery, drugs & pharmaceuticals and chemicals) stood at US$ 151.96 billion between April 2021 and October 2021.
The overall index stood at 126.7 as of September 2021. This rise was supported by growth in the production coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity.
In September 2021, outputs increased for natural gas by 27.5%, coal 8.1%, petroleum refinery production (6.0%), steel (3.0%), cement (10.8%), electricity (0.3%) and fertilizers (0.02%); However, output for crude oil declined by 1.7%.