India’s manufacturing performance has strengthened further in recent quarters, with GVA (gross value added) growth of 7.72 per cent in Q1 FY26 and 9.13 per cent in Q2, supported by a gradual shift towards higher-value production, improved industrial infrastructure, and wider adoption of technology and formalisation, an official statement said on Thursday.

The Economic Survey 2025-26 highlights that medium- and high-technology industries now contribute 46.3 per cent of India’s manufacturing value added, signalling a gradual shift towards more sophisticated production structure.

“Reflecting these gains, India’s global industrial competitiveness has improved, with the country’s ranking in the Competitive Industrial Performance (CIP) index rising to 37th in 2023 from 40th in 2022,” the statement said.

Notably, manufacturing today sits as the engine of growth for India’s ambition to become a $35 trillion economy by 2047, with reforms, sectoral initiatives, and resilient supply chains.

The statement further said that the Union Budget 2026-27 has reinforced support for manufacturing through targeted measures focusing on investment incentives, innovation, infrastructure development, and industrial ecosystem strengthening.

Moreover, the industrial activity continues to gain strength, with real Industry GVA growing at 7 per cent year-on-year in the first half of FY 2025-26.

This momentum carried further into the year as industrial production rose 7.8 per cent in December 2025, the strongest expansion in over two years, after registering a high growth of 7.2 per cent (revised estimate) in November 2025.

“This expansion, also reflected in the Index of Industrial Production (IIP), is primarily driven by the manufacturing sector registering a growth of 8.1 per cent in December 2025. Within this, strong growth was recorded in computer and electronic products (34.9 per cent), motor vehicles and trailers (33.5 per cent), and other transport equipment (25.1 per cent),” said the government.

Forward-looking indicators continue to reflect optimism in India’s industrial sector, with the manufacturing Purchasing Managers’ Index (PMI) remaining firmly in expansion zone (well above the 50 mark) since March 2023.

In January 2026, PMI stood at 55.4, above its long-run average, indicating continued improvement in the sector’s health.