Indian Economy Overview

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Largest Economy
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Trillion Manufacturing by 2025
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Why manufacturing in India?

India is one of the fastest-growing and has become the fifth-largest economy in 2019, overtaking the United Kingdom and France, with a nominal GDP of $2.94 trillion. Manufacturing has emerged as one of the high growth sectors in India. India is expected to become the fifth largest manufacturing country in the world by the end of the year 2020*. There are various Government initiatives such as ‘Make in India’ ‘Skill India’ and ‘National Manufacturing Policy’ to place India on the world map as a manufacturing hub and give global recognition to the Indian economy. Some of the Government measures to boost exports sector includes

Benefits of MSMEs (Micro, Small and Medium enterprise) and small exporters, leading to their increased contribution to exports

Guaranteed benefits to exports

Improved competitiveness by corporate Tax rationalization

Reduce lending cost

Ease of doing business

There is an increasing share of the young working population in the total population. India aims to achieve its full manufacturing potential as it looks forward to benefiting from its demographic dividend and large workforce over the next two to three decades.


The manufacturing sector of India has the potential to reach US$ 1 trillion by 2025, and India is expected to rank amongst the top three growth economies and manufacturing destinations of the world by the year 2020.


India Nominal GDP: $2.94 trillion-India GDP (PPP) 

$10.51 trillion: India is the fastest-growing trillion-dollar economy in the world and the fifth-largest overall, with a nominal GDP of $2.94 trillion. The country ranks third when GDP is compared in terms of purchasing power parity at $11.33 trillion. When it comes to calculating GDP per capita, India’s high population drags its nominal GDP per capita down to $2,170. The Indian economy was just $189.438 billion in 1980, ranking 13th on the list globally.


While the economy has welcomed international companies to invest in it with open arms since liberalization in the 1990s, Indians have been prudent and pro-active in adopting a global approach and skills. Indian villagers proudly take up farming, advanced agriculture and unique handicrafts as their profession on one hand while modern industries and professional services sectors are coming up in a big way on the other.

Gross Value Added (GVA) Composition by Sector (2017-18, 2nd Advance Estimate)

Services 54.3%
Industry 29.6%
Agriculture 16.15%

The Government aims to achieve a 25% GDP share and 100 million new jobs in the sector by 2022.

Manufacturing Sector Highlights

CAGR Growth
Billion GVA
Million Jobs By 2025

Market Size

The Gross Value Added (GVA) at basic current prices from the manufacturing sector in India grew at a CAGR of 4.29 percent during FY12 and FY19 as per the annual national income published by the Government of India. The sector’s Gross Value Added (GVA) at basic prices based at current prices is estimated at US$ 403.47 billion in FY19PE. Quarterly GVA at Basic Prices for Q1 2019-20 stood at Rs 697,824 crore (US$ 99.85 billion in Q2 FY20. Under the Make in India initiative, the Government of India aims to increase the share of the manufacturing sector to the gross domestic product (GDP) to 25 percent by 2022, from 16 percent, and to create 100 million new jobs by 2022. Business conditions in the Indian manufacturing sector continue to remain positive. The manufacturing component of the IIP stood at 130.1 during April-October 2019 and grew 0.5 percent year-on-year. India’s overall exports in April-November 2019-20 are estimated to be US$ 353.96 billion.

* According to the Global Manufacturing Competitiveness Index published by Deloitte

* Source India Brand Equity Foundation (IBEF)

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