India’s mfg sector poised for strong growth, expansion, says Ficci survey

New Delhi: India’s manufacturing sector is showing strong growth momentum, with 87 per cent of respondents in a Ficci survey reporting same or higher production levels for Q2 FY 2025-26 (July-September), up from 77 per cent in Q1, signalling a positive trend.

The survey, covering eight key sectors—including automotive, capital goods, chemicals, electronics, white goods, machine tools, metals, and textiles—also showed that 83 per cent of manufacturers expect higher domestic orders this quarter, supported by recent GST rate cuts.

However, production costs remain elevated. Over half of respondents reported higher costs as a percentage of sales, driven by rising prices of raw materials such as bulk chemicals, metallurgical coke, iron ore, labour, logis-tics, power, and utilities.

The survey included both large and SME units with combined annual turnover exceeding Rs 3 lakh crore. Current average capacity utilization stands at around 75 per cent, reflecting steady economic activity. Over 50 per cent of respondents plan investments or expansions in the next six months, though challenges such as geopolitical risks, trade re-strictions, labour shortages, and regulatory hurdles persist.

On exports, more than 70 per cent expect performance to be at par or higher than last year, up from 61 per cent in Q1. Man-ufacturers reported an average interest rate of 8.9 per cent, with 81 per cent noting adequate availability of bank funding for working and long-term capital.

Workforce availability remains satisfactory for nearly 80 per cent, though 20 per cent cite a shortage of skilled labour, highlighting the need for continued government and industry interventions.

The survey underscores optimism in India’s manufacturing sector, with robust demand, investment plans, and stable export expectations pointing to sustained growth despite cost pressures and operational challenges.