INDIA'S MANUFACTURING SECTOR BACK IN MOTION

Rising production, renewed investment, and cautious optimism define India's manufacturing landscape as industries rebound from uncertainty and brace for steady growth.

- By Team ET Now Machinist

India’s manufacturing engine is humming again. According to FICCI’ latest Quarterly Survey on Manufacturing (QSM), the second quarter of FY 2025-26 brought a renewed sense of momentum and confidence across industries from automobiles and electronics to chemicals, metals, and textiles.

If the first quarter hinted at a cautious recovery, the second has confirmed it. Nearly 87% of surveyed manufacturers reported production levels that were either higher or at par with the previous quarter, a sharp rise from 77% in Q1. Domestic demand too has improved, with 83% of respondents anticipating higher orders in the months ahead buoyed by GST rate cuts and a generally upbeat economic mood.

At a macro level, the industry's average capacity utilisation stands at 75%, a healthy indicator of steady economic activity. Even more encouraging is the investment outlook: one in two manufacturers plans to expand capacity or invest further within the next six months.

CAUTIOUS CONFIDENCE, GROUNDED IN REAL CHALLENGES

Beneath the optimism, though, lie the familiar hurdles. Manufacturers cite geopolitical volatility, supply chain issues, and regulatory complexity as persistent constraints. While India’s manufacturing sector has matured in resilience, the report reminds policymakers that tariffs, trade restrictions, and raw material shortages continue to weigh on the expansion story.