File Photo: A security personnel guards outside the Ministry of Finance at the North Block, in New Delhi, Thursday, Feb. 1, 2024. | Photo Credit: PTI

Ahead of the launch of the new series of industrial growth data, a Finance Ministry report has said that the underlying momentum in the industrial sector remains intact. Further, it said that continued policy support will remain instrumental in sustaining this momentum.

“The continued resilience in construction-linked sectors, expanding manufacturing exports, sustained hiring intent, large scale investment commitments, and emerging strength in sunrise sectors suggests that the underlying momentum in the industrial sector remains intact,” a report by the Department of Economic Affairs (DEA) of the Finance Ministry said.

This commentary arrives alongside a dual set of data showing subdued economic performance. India’s core sector output crawled to a two-month high of 1.7 per cent in April, buoyed by steel, cement, and electricity, despite contractions in five other sectors. Simultaneously, the Manufacturing Purchasing Managers’ Index (PMI) ticked up to 54.7 in April from March’s 53.9, yet still registered the second-slowest growth in operating conditions in 46 months.

The report further said that continued policy support, whether through the recently approved BHAVYA scheme or through the targeted interventions under PLI, SPECS, Promotion of Surface Coal/Lignite Gasification Projects and the broader semiconductor mission, will “remain instrumental in sustaining this momentum and facilitating a more broad-based industrial recovery as external conditions gradually stabilise.” It noted that the near-term outlook remains challenging due to external uncertainties, most notably the trajectory of the West Asian conflict and its secondary impact on energy prices and industrial input costs.

Highlighting the S&P Global’s report on PMI Manufacturing about resilience in the manufacturing sector, the DEA report mentioned the continuing pipeline of investment commitments, which has remained robust despite the prevailing global uncertainty. “Toyota Motor Corporation is reportedly considering establishing additional vehicle assembly plants in Maharashtra, with planned investments estimated at around $1.9 billion, underscoring the longer-term recalibration underway in global automotive supply chains,” it said while adding that post completion, the company’s production capacity in India will increase to 10 lakh units by the 2030s, potentially positioning the country among the company’s largest global production bases outside Japan.

According to the DEA report, the electronics and semiconductor value chain is gathering momentum, with the ELCINA Electronics Manufacturing Cluster at Bhiwadi, Rajasthan, attracting planned investments of over ₹1,200 crore from 20 companies, of which 11 are already operational and generating employment for over 2,700 persons. “The Sahasra Semiconductors ATMP/OSAT facility, supported under MeitY’s SPECS scheme, has become the first SME-led semiconductor packaging unit to commence commercial production in India,” it said while adding that a significant share of its production is already being exported to global markets.

Further, India’s military drone manufacturing industry is expected to grow four-to-five-fold by March 2028 as “order books swell on account of price competitiveness against established suppliers from Israel, the US, Turkey, China, and Iran.” The sector generated revenues of up to ₹3,000 crore in 2025-26 with roughly two-thirds derived from military contracts. Similarly, total Indian arms exports, more broadly, rose by 62 per cent year-on-year to a record ₹38,424 crore in the same fiscal year, underscoring the increasing global acceptance of Indian defence manufacturing capabilities.

Published on May 31, 2026