India’s Growth Finds Firm Ground in Manufacturing
Here is the translated article in The Hindu-style op-ed format, with pull quotes added for emphasis and readability:
By Sanjeev Oak
“The recent uptick in industrial production points to a strengthening economy, supported by resilient domestic demand and a manufacturing-friendly policy environment.”
India’s industrial output saw a notable increase in January, signaling the robust foundations of the country’s economic growth. According to a report by the Union Bank of India, industrial activity — as measured by the Index of Industrial Production (IIP) — is estimated to have grown by 3.7% in January 2025, up from 3.2% in December 2024.
This modest yet consistent growth is underpinned by strong domestic demand and supportive government policies aimed at fostering a self-reliant manufacturing ecosystem. While January’s industrial growth figure remains slightly below the 4.2% recorded in January 2024, it nonetheless reflects a positive trajectory amidst persistent global uncertainty.
“A 3.7% IIP growth may appear modest, but in a fragile global economy, it signals healthy underlying momentum.”
— Economic Analyst
A Composite View of India’s Industry
The IIP is a composite indicator that reflects trends in manufacturing, mining, and electricity. The report attributes the January growth to improved industrial turnover, particularly in sectors that have benefited from policy incentives. However, it also notes that India’s merchandise exports declined by 2.4% year-on-year, even as imports rose by 10.3% — highlighting the complex interplay of domestic robustness and external vulnerability.
“While exports dipped, the surge in imports points to rising domestic consumption — a strong driver for manufacturing.”
— Union Bank Report
Global economic headwinds continue to influence India’s export-dependent sectors. Sluggish demand from key trade partners such as the United States and the European Union has weighed on exports. Volatile commodity prices — particularly crude oil — have further impacted production costs and contributed to inflationary pressures.
Inflation, in turn, tends to dampen consumer demand and slow industrial growth. The report emphasizes the importance of disaggregated sectoral analysis to understand these dynamics more clearly.
Government Support and Policy Incentives
The impact of government schemes, especially the Production-Linked Incentive (PLI) initiative, has been instrumental in bolstering industrial activity. These schemes are designed to boost investment, enhance productivity, and promote exports in key sectors such as electronics, pharmaceuticals, and automobiles.
“The PLI scheme is doing what it set out to do — drive investments and transform India into a global manufacturing hub.”
— Policy Commentator
The Centre’s record capital allocation for infrastructure in recent budgets has also contributed to the uptick in industrial activity. Investment in roads, railways, ports, and power is expected to reduce logistics costs, enhance connectivity, and make Indian manufacturing more competitive globally.
While global geopolitical tensions, supply chain disruptions, and inflation persist, the resilience of India’s industrial sector offers a silver lining. The report notes that trade tensions initiated by the United States are likely to further affect India’s exports. Nonetheless, the continued growth in manufacturing reaffirms the sector’s resilience.
Domestic Demand as a Growth Anchor
The strength of India’s domestic market continues to be a defining feature of its economic performance. A growing middle class with increasing purchasing power has been a key driver of demand-led growth. The report attributes much of the recent industrial expansion to this rise in consumption.
“India’s middle class is not just growing in size — it’s growing in purchasing power. This is the true engine of demand.”
— Industry Expert
Post-pandemic, India has outpaced several global economies in growth, even as the external environment remains sluggish. The Centre’s continued focus on infrastructure and manufacturing is expected to sustain this momentum.
The Make in India campaign, launched with the objective of attracting foreign investment and transforming India into a global manufacturing hub, continues to yield results. It complements schemes such as PLI in building domestic production capacity and creating jobs.
Competitive Edge in Labour-Intensive Sectors
India’s competitive labour costs — coupled with a large and youthful workforce — have given it an edge in labour-intensive sectors. To further enhance productivity, the government has placed emphasis on skill development through national-level training initiatives.
“India’s young workforce, if skilled adequately, can become the foundation of a new manufacturing revolution.”
— Labour Economist
This demographic advantage, combined with rising demand for electronics, growing e-commerce penetration, and shifting global supply chains, offers new opportunities for India’s manufacturing sector.
India’s industrial base, though traditionally driven by domestic consumption, is also gradually expanding its global footprint. The growth in exports in select categories, despite broader global weakness, suggests a maturing production ecosystem.
Manufacturing as a Bellwether
The recent IIP numbers are more than just data points — they reflect India’s evolving position in the global economic order. While global uncertainties remain — from geopolitical strife to fluctuating fuel prices — India’s manufacturing sector is emerging as a pillar of stability and progress.
“At a time when global growth falters, India’s manufacturing sector is quietly building a case for long-term resilience.”
— IMF Insight
Looking ahead, sustained public investment, targeted incentives, and a focus on skilling the workforce will be key to maintaining this growth. With the right interventions, India’s manufacturing sector could become a major contributor not just to GDP, but to employment, exports, and innovation.
In a world grappling with economic fragmentation, India’s steady industrial growth — anchored by domestic demand and strategic state support — offers a rare story of optimism. The Index of Industrial Production, in effect, has reaffirmed what many already sense: that India’s growth is real, and it is being forged on the factory floor.