India's Manufacturing Surge: Sustained Growth Amid Global Challenges

India's manufacturing sector is projected for significant growth, spurred by robust domestic demand and a favorable investment climate, according to the FICCI Quarterly Manufacturing Survey for Q2 FY2025-26. The report, analyzing eight industries, reveals an optimistic production outlook, with 87% of participants experiencing stable or increased outputs during July-September 2025.

Strong domestic demand is a key driver, with 83% of manufacturers anticipating higher orders, bolstered by favorable GST adjustments. Current capacity utilization signals economic stability at 75%, while over half of manufacturers plan investment expansions within six months. However, challenges like global geopolitical tensions, trade restrictions, and rising operational costs persist.

Despite cost pressures, financial conditions are advantageous; manufacturers report an average borrowing rate of 8.9% and ample access to bank funds. More than 70% foresee stable or increased exports, particularly in sectors like automotive, electronics, and chemicals. Hiring remains positive, with 57% aiming to expand their workforce, although skill shortages persist.

(With inputs from agencies.)