India’s Manufacturing Sector Grows at 10.88% CAGR, Driven by Govt Schemes

India’s manufacturing sector has become a central driver of economic growth with rising output, exports and investment, and the country has seen rapid gains in defence production and electronics manufacturing, an official factsheet said on Saturday. The manufacturing sector now contributes about 16–17 per cent of GDP and employs over 27 million workers, and the compounded annual growth rate (CAGR) of its GVA at constant prices is 10.88 per cent, the government said. The statement noted that merchandise exports in July 2026 reached $44.24 billion compared with $36.98 billion a year earlier, while manufacturing output grew 7.8 per cent in June 2026.

India’s defence industry has transformed remarkably in a decade with focused policies, targeted investments, and a strong push for self-reliance. The value of indigenous defence production reached a record Rs 1.78 lakh crore in FY26, up 15.6 per cent from Rs 1,54,071 crore in the previous fiscal and Rs 46,429 crore in 2014–15. “Electronics production rose from Rs 11.32 lakh crore in FY25 to Rs 13.11 lakh crore in FY26, a 15.8 per cent year‑on‑year increase,” the statement added, noting that mobile phone production has skyrocketed, with exports rising to Rs 2.59 lakh crore. India's emergence as a semiconductor destination has been built on sustained reforms across the electronics sector.

Twelve manufacturing units have been approved with investments exceeding Rs 1.64 lakh crore under Semicon India Programme 1.0, as of July 2026. These include one silicon fab, one silicon carbide fab, an integrated Gallium Nitride Micro LED display fab, and nine packaging units. The PLI scheme for Large Scale Electronic Manufacturing (LSEM) has attracted around Rs 96,000 crore in investments across the mobile manufacturing ecosystem. The statement noted that steady growth in pharmaceutical production, exports, and domestic innovation has reinforced India's position as a trusted global supplier.

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