In FY24, India exported over $435 billion in goods, led by sectors like electronics, chemicals, and machinery.
| Photo Credit:
Siva SaravananS
India’s manufacturing gross value added (GVA) is projected to grow from $459 billion in FY24 to $1.6 trillion by FY2034, according to a report by 3one4 Capital’s ‘Future of Production Report 2025’. This manufacturing renaissance is driven by significant capital expenditure, strategic government policies such as the Production Linked Incentive (PLI) scheme, and even global supply chain shifts.
The industrial sector currently contributes 27.6 per cent to the GDP, with manufacturing alone accounting for 14.2 per cent. Employing 67.7 million people, manufacturing also delivers a GVA per worker of ₹5.22 lakh – three times more productive than agriculture. In FY24, India exported over $435 billion in goods, led by sectors like electronics, chemicals, and machinery.
Electronics and automobile see exponential growth
According to the report, electronics production reached $115 billion in FY24. Mobile phone exports exceeded $15 billion as giants like Apple scaled their operations across the country. This boost in domestic production is driven by the PLI scheme which has seen a $30 billion investment across 14 key sectors. “Electronics manufacturing and IT hardware have shown tremendous response to the scheme and so have semiconductors and displays,” said Anurag Ramdasan, Partner at 3one4 Capital.
In the automotive sector, India has become the third-largest market. Exports of auto components surged to $20 billion in FY24 making the country a key supplier to global Original Equipment Manufacturers (OEMs). This growth is also attributed to rising demand in smart mobility, EV supply chains, rapid charging, and component digitisation.
Chemicals and aerospace sectors gain ground
The report found that the chemicals sector, currently contributing to 6 per cent of the market share is expected to double to 12 per cent by 2029. This growth is driven by exports of biosimilars (complex generics) and CRAMS (Contract Research and Manufacturing Services) coupled with PLI schemes and PCPIR (Petroleum, Chemicals, and Petrochemicals Investment Regions) clusters that support investments in these segments.
India is also gaining momentum in aerospace manufacturing with start-ups like ideaForge and Aereo building India’s leadership in drones, aerial intelligence, and autonomous systems. The textile sector is benefiting from diversification away from traditional supply bases like China, Vietnam and Bangladesh.
As exports remain central to this growth, “India is actively working on expanding free trade agreement and is expected to lower tariffs and continue to remain competitive. India today is a preferred alternative globally and we expect that to continue,” said Ramdasan.
State backing
Additionally, State incentives power regional growth. “States like Gujarat, Uttar Pradesh, Odisha, and Assam offer substantial capital subsidies alongside benefits such as land rebates, interest subsidies, and tax exemptions. States like Maharashtra, Tamil Nadu, and Karnataka, which have established industrial ecosystems, are now pivotal in manufacturing advanced electronic components, pharmaceuticals, and automotive products. Meanwhile, emerging regions like Uttar Pradesh and Gujarat are making strides in white goods and specialty steel, demonstrating the extensive scope of India’s manufacturing transformation,” Ramdasan added.
According to the report, VCs are also eyeing India’s emerging manufacturing sectors, drawn by their scale-up potential. Over $10 billion has been committed to semiconductors and advanced materials, while India’s GreenTech firms like Waaree Energy are gaining global traction. Biomanufacturing has also shown growth potential, backed by over 200,000 biosciences professionals and PLI schemes, alongside momentum in full-stack platforms and robotics.
With inputs from businessline intern Nethra Sailesh
Published on May 1, 2025