One of the key indicators of the growing strength of India’s manufacturing sector is the Annual Survey of Industries (ASI), conducted by the Ministry of Statistics and Programme Implementation. The ASI offers valuable insights into the country’s manufacturing landscape by analyzing output, employment, and capital investment across various industries.
The latest survey, covering the 2022-23 period and released in September 2024, reveals significant growth in key sectors, along with an expansion in warehousing demand and a surge in employment. Together, these trends highlight India’s expanding manufacturing capabilities and its potential as a reliable partner for U.S. manufacturers looking to diversify their supply chains.
Key Growth Sectors Driving India’s Manufacturing Expansion
The ASI survey data from 2022-23 points to significant growth in several key manufacturing sectors, including basic metals, motor vehicles, chemical products, and food processing. These sectors contributed 58% of India’s total manufacturing output, with an impressive 24.5% increase in overall output during this period. This surge in production underscores the strength of India’s manufacturing base and its ability to meet the growing demand for diverse industrial products.
The motor vehicle industry, in particular, has seen rapid growth, benefiting from increased investments and a more robust supply chain. Similarly, the basic metals sector, which plays a crucial role in heavy machinery and industrial applications, continues to expand. For U.S. manufacturers, these sectors present strong opportunities to source components and materials from a country that is clearly on the rise.
Post-Pandemic Surge in Manufacturing Employment
Another standout finding from the ASI survey is the 7.5% increase in manufacturing employment in 2022-23, bringing the total number of workers in the sector to 18.5 million. This marks a significant recovery, as employment has now surpassed pre-pandemic levels by over 2.2 million workers. States such as Tamil Nadu, Maharashtra, Gujarat, and Uttar Pradesh have emerged as key regions for manufacturing employment, offering a large pool of skilled labor.
For U.S. manufacturers, this surge in employment reflects India’s capacity to provide a stable and expanding workforce. With a labor force that is growing alongside the country’s industrial output, India is well-positioned to support a wide range of manufacturing activities, from labor-intensive production to highly specialized processes.
Rising Warehousing Demand Reflects Manufacturing Growth
The rapid growth in India’s manufacturing sector is closely linked to a surge in warehousing demand. According to a recent report from CBRE, the share of manufacturing-related sectors in total warehousing demand grew from 15% in 2019 to 25% in the first half of 2024. Major cities such as Pune, Delhi-NCR, and Kolkata have seen significant increases in warehouse leasing, driven by the expansion of industries like electronics, auto components, and domestic appliances.
This rise in warehousing demand reflects the broader growth of India’s manufacturing sector and its evolving supply chain infrastructure. As manufacturers expand their operations, the need for efficient warehousing and logistics support becomes increasingly critical. The availability of industrial and logistics space in India positions the country as a well-prepared destination to handle global manufacturing needs, including those of U.S. companies seeking reliable partners for their supply chains.
As a U.S.-based company with 30 years of experience, Source Machining Specialties specializes in helping U.S. manufacturers with their manufacturing needs in India. We’re so confident in our Indian production facilities that we invite you to a site audit at our expense. Discover more about our capabilities and services, and let’s start a conversation.
