India’s Manufacturing Sector Shows Resilience, Stable Growth: FICCI Survey
India’s manufacturing sector continues its upward trajectory, with 83% of companies reporting stable or higher production levels in Q3 FY 2025, according to FICCI’s latest Quarterly Survey on Manufacturing (QSM). This marks the second-highest index level in recent years, reinforcing optimism for sustained industry growth.
The investment outlook remains steady, with 42% of respondents planning expansions over the next six months, similar to previous trends. While domestic demand remains strong, concerns over future demand persist, particularly in exports. However, 83% of businesses expect increased order volumes in Q3 FY 2025 compared to the previous quarter.
Key Sectoral Insights
FICCI’s 64th QSM analyzed data from eight major industries, including automotive, capital goods, chemicals, pharmaceuticals, electronics, machine tools, metals, and textiles, covering both large and SME segments with a collective turnover exceeding ₹4.7 lakh crore.
- Capacity Utilization: Average manufacturing capacity utilization stands at 75%, indicating robust production activity.
- Exports: Over 70% of respondents anticipate higher exports in Q3 FY 2025, reflecting improved global market conditions.
- Hiring: Around 35% of firms plan to increase their workforce in the coming three months.
- Interest Rates & Financing: The average interest rate for manufacturers is 9.5%, with 80% confirming sufficient bank funding availability.
Challenges & Cost Pressures
Despite positive trends, rising raw material costs, high interest rates, and regulatory hurdles pose expansion challenges. Production costs remain elevated, with 60% of businesses citing higher input expenses, driven by rising prices of iron, steel, rubber, chemicals, labor wages, and freight charges.
Workforce availability remains manageable, though 20% of respondents report a shortage of skilled labor. Industry leaders emphasize the need for government and private sector collaboration to address labor and regulatory concerns.
Source: FICCI
