India's Manufacturing Sector
Structure and Key Drivers
India's manufacturing sector contributes approximately 17% of GDP and employs over 5 crore people in the organised sector. It encompasses a wide range of industries: pharmaceuticals, chemicals, automobiles, textiles, food processing, electronics, engineering goods, and metals. India's manufacturing competitiveness depends heavily on input cost stability (raw materials, energy), infrastructure quality, labour productivity, and export demand. The West Asia conflict is relevant because it raises crude oil prices (India imports 85%+ of crude), disrupts petrochemical supply chains, and reduces purchasing power in Middle Eastern markets (a significant destination for Indian exports — particularly engineering goods, pharmaceuticals, and food products).
- India's Index of Industrial Production (IIP) measures output in manufacturing, mining, and electricity; PMI is a sentiment/activity indicator that tends to lead IIP trends by 1–2 months.
- India's manufacturing exports in FY2024-25 were approximately $460 billion in total merchandise exports.
- West Asia accounts for roughly 10–12% of India's total merchandise exports, making it a significant demand-side factor.
- Input price inflation above 3.5-year highs (March 2026) signals that import-driven cost pressure is worsening — consistent with the petrochemical duty exemption measures taken simultaneously.
- Despite the PMI slowdown, employment growth hitting a 7-month high suggests firms are hiring for medium-term capacity, not just current demand.
● Tracked since February 20, 2026 · last seen April 02, 2026 · updates as the daily brief publishes