FICCI survey signals renewed momentum in Indian manufacturing

India’s manufacturing sector is poised for sustained growth and expansion, driven by strong domestic demand and a positive investment climate, according to the latest FICCI Quarterly Survey on Manufacturing for the second quarter of FY2025-26.

The survey, released by the Federation of Indian Chambers of Commerce and Industry (FICCI), covered performance across eight major industries Automotive, Capital Goods, Chemicals, Electronics, Machine Tools, Metals, Textiles, and Miscellaneous sectors. Conducted between July and September 2025, it found that 87 per cent of respondents reported higher or stable production levels, up from 77 per cent in the previous quarter. The optimism is largely attributed to resilient domestic demand, with 83 per cent of participants expecting higher orders in the coming months, aided by recent GST rate cuts. Capacity utilisation averaged 75 per cent, reflecting steady industrial activity, while more than half of the manufacturers indicated plans for new investments or capacity expansion over the next six months. However, global uncertainties, trade restrictions, and elevated input costs remain key challenges.

Despite cost pressures mainly from rising raw material, energy, and logistics expenses financial conditions were reported as stable. The average lending rate stood at 8.9 per cent, and 81 per cent of respondents confirmed adequate access to bank financing. Export expectations also remain positive, with over 70 per cent of manufacturers projecting exports to be higher or similar to last year’s levels. Hiring sentiment was upbeat as well, with 57 per cent planning to increase their workforce, though some industries highlighted the need for more skilled labour. Sector-wise, robust growth is anticipated in automotive, electronics, machine tools, and metals, underscoring manufacturing’s continued resilience amid global headwinds.

Industry experts note that the sector’s steady performance signals confidence in India’s industrial momentum. FICCI emphasized that sustained policy support, improved infrastructure, and a conducive investment environment will be critical to maintaining this growth trajectory as the country works to solidify its position as a global manufacturing hub in FY2025-26 and beyond.