Manufacturing Set to Drive India’s $5 Trillion GDP Goal

India's manufacturing industry is on the edge of a significant shift, with its gross value added (GVA) growing from $459 billion in FY24 to $1.6 trillion by FY2034, according to 3one4 Capital's Future of Production Report 2025. The expansion is supported by robust capital investment, policy measures such as the Production Linked Incentive (PLI) scheme, and transforming global supply chains.

Today, the industrial economy contributes 27.6% to India's GDP, while manufacturing alone accounts for 14.2%. It provides jobs for 67.7 million workers and has a GVA per employee of ₹5.22 lakhs, three times more than agriculture. In FY24, goods exports from India exceeded $435 billion, with the leadership of electronics, chemicals, and machinery.

Production of electronics touched $115 billion, with exports of mobile phones surpassing $15 billion. The PLI scheme brought in $30 billion investment in 14 sectors, led to major jumps in electronics, semiconductors, and display. The auto industry also picked up steam, and India became the third-largest automobile market, with exports of auto components reaching $20 billion, fueled by EVs and smart mobility.

The chemicals industry, with a 6% market share, is likely to double by 2029 with the help of exports of biosimilars and CRAMS, and PCPIR clusters. Aerospace is picking up pace with start-ups such as ideaForge and Aereo in drones and autonomous technologies. Textile export is also gaining strength with diversification out of traditional markets.

The government has been generous with incentives in the case of Gujarat, Uttar Pradesh, and Odisha, inviting manufacturing investment, while Tamil Nadu, Maharashtra, and Karnataka concentrate on high-technology areas. VCs, on the other hand, are investing more than $10 billion in semiconductors, advanced materials, and Green Tech, while bio manufacturing and robotics hold promise.

India's effort towards new trade pacts and reductions in tariffs continues to bolster its status as a favored destination for global manufacturing.