Manufacturing  Industry Generates 17% ’of India’s GDP  & Employs 27m Workers

The  manufacturing  industry generates 17% ’of India’s GDP  & employs 27m workers, it is projected to be one of the fastest growing sectors &  has the potential to reach 1.75 trillion by 2030 @cagr of 15% from 660b today . Auto industry is the biggest contrubtor  to the sector at 49% various reasons are going to lead the growth as realignment of supply chains is happening,

 Balance sheets of corporates are strong like never before, low labour costs, ( PLI), Increasing Investment, FDI ,are all  going to accelerate the growth multifold.

Growth will be led by Elctronics manufacturing @32% CAGR Pharma @17%CAGR, Chemical 11%,Auto & Auto ancillaties 12%, Textiles @10% , Machinery & Equipment @8%. which will take the share of the manufacturing industry to 25% of the GDP from 17% today. 

Foxconn has plans for large expansion. It is planning to build 12 new factories in India, Vedanta has plans to invest 20B $to manufacture made in india chip by end 25, Tata electronics is  become first Indian company to make iPhones with the winston deal valued at 1000 cr. Apple aims to manufacture 25 per cent of iPhones sold globally in India by 2025.

European energy crisis is also contributing to the chemical growth . There has 350% Y-o-Y increase in natural gas prices during the peak month of August 2022

Over the medium-term, lower costs may translate into more order wins, production lines shifting from Europe to Asia, and steady market share gains for Indian companies.particularly those that have vertical integration or operate in higher-margin or niche value chains). Companies have also been on a record capex spree to meet rising demand due to the shift away from China

Potentially, a 20% shift in specialty chemical supply chain from China to India can almost double the size of Indian  industry

About the Author :  Suman Agarwal, an equity expert who offers guidance and recommendations on how to invest.