Manufacturing

1. India’s Manufacturing Landscape: 2023–2025

India’s manufacturing sector continued to expand steadily through 2023 to 2025. Gross value added (GVA) from manufacturing reached over USD 350 billion in FY 2024–25, contributing around 17% of national GVA. While annual growth moderated to around 4–5%, the sector maintained its central role in India’s economic diversification and export drive.
Industrial production experienced variable momentum. In early 2025, segments like consumer durables and capital goods posted healthy growth, though overall output slightly softened compared to the previous fiscal year. Manufacturing remains a critical employment generator, with over 1 million net jobs added in the last recorded period.
Capital formation rose sharply, reflecting strong investment in both plant and machinery. Large domestic corporates and global players ramped up spending, especially in electronics, automotive components, green technologies, and advanced materials.
Electronics manufacturing emerged as a major engine of growth. The sector now contributes around 3% of GDP, with mobile phone production and exports accelerating rapidly. India is strengthening its position as a global hub for smartphone assembly, semiconductors, and component fabrication.

2. Policy Framework and Industrial Reforms

India’s industrial policy remains anchored in self-reliance, value addition, and competitiveness. The Production-Linked Incentive (PLI) scheme, launched to support manufacturing in 14 sectors, experienced mixed results. While it significantly boosted electronics and mobile assembly, other sectors like solar, textiles, and white goods lagged behind expectations.
In 2025, the government began transitioning to new frameworks focused on deep manufacturing—specifically incentivizing capital goods, components, and supply chain resilience. Targeted subsidies, import substitution strategies, and industrial corridors are being fine-tuned to attract long-term investment and build scale.
Despite policy ambitions, challenges remain: rising raw material costs, skills shortages, infrastructure bottlenecks, and pressure on profit margins continue to affect manufacturers across the board. However, medium-term indicators remain positive, with India aiming to increase the manufacturing sector’s share in GDP beyond 20%.

3. India–France Industrial Cooperation

France and India maintain a long-standing industrial partnership, particularly in high-value sectors such as aerospace, automotive, transport, and defense manufacturing. French companies have expanded their footprint in Indian industrial zones, contributing to localization, engineering innovation, and vocational training.
New opportunities are emerging in areas like smart manufacturing, precision tools, robotics, and clean-tech equipment. French industrial expertise in automation, quality control systems, and materials engineering aligns well with India’s need to upgrade its manufacturing capabilities.

Future bilateral cooperation could also deepen around electric mobility components, battery manufacturing, industrial IoT, and sustainable industrial infrastructure. Industrial clusters and joint technology platforms can enhance scale and efficiency for both partners.

4. Outlook Beyond 2025

Looking ahead, India seeks to scale up its manufacturing exports to over USD 1 trillion by 2028. Key export sectors include electronics, pharmaceuticals, engineering goods, auto components, and textiles. Government plans focus on logistics modernization, energy-efficient manufacturing, and R&D-driven industrial ecosystems.
Private sector investment is expected to continue rising, especially in capital-intensive industries and advanced technologies. India’s large domestic market, improving infrastructure, and digital transformation initiatives make it an attractive base for both domestic and global manufacturing strategies.

France, as a strategic industrial partner, has a strong role to play in this journey—both in helping build resilient supply chains and in fostering innovation through co-development and co-investment.

Strategic Importance for FIBC

Supports promotion of French industrial expertise and joint ventures in India’s expanding manufacturing ecosystem.
Helps members identify priority sectors for bilateral investment, including automotive tech, electronics, sustainable industry, and engineering services.
Enables stronger visibility for France as a reliable technology and industrial partner, supporting Make in India and export diversification strategies.
Fosters linkages between French regional clusters and Indian industrial corridors, encouraging deeper supply chain integration.