India’s industrial sector has shown remarkable resilience over the past decade. The Index of Industrial Production (IIP)—our key gauge for tracking industrial momentum—has moved up from 103 in 2012–13 to 147 in 2023–24. That’s not just growth—it’s compounding confidence in India’s manufacturing base and broader industrial ecosystem.
Manufacturing, which holds the lion’s share (77.6%) in the IIP basket, has led the charge. From 104.8 in 2012–13, it has surged to 144.7 in 2023–24. This reflects steady expansion across sectors like automobiles, machinery, chemicals, and textiles—indicating that the Make in India push and PLI schemes are translating into real output.
Mining, with a 14.4% weight, has also rebounded strongly. From a sluggish phase between 2013 and 2016, it has climbed to 128.9 in 2023–24, supported by increased production of coal, natural gas, and metallic ores.
A quiet but crucial contributor has been Electricity Generation (8% weight). Often overlooked, it’s vital to powering industry. From an index level of 170 in 2021–22, it has grown to 198 in 2023–24. This growth captures India’s dual energy story—rising generation from conventional sources and a surge in renewable capacity from wind and solar.
The takeaway? India’s industrial story is no longer stop-and-go—it’s a coordinated, broad-based acceleration. And in an uncertain global environment, that kind of domestic robustness stands out.
India’s Manufacturing Momentum.
What’s really driving India’s manufacturing growth. The Manufacturing sector alone makes up 77.6% of the IIP—and within it, some segments are clearly leading the pack.
Let’s look at the data behind the momentum:
Basic Metals (12.8% weight) – A pillar of infrastructure and construction, this segment has clocked an impressive 3-year CAGR of 12.6%, reflecting strong demand in steel, aluminium, and related industries.
Refined Petroleum (11.8% weight) – India’s refining capacity has kept pace with domestic and export demand. It has grown at 6.1% CAGR over the past three years—steady, even amid global energy volatility.
Motor Vehicles (4.9% weight) – A clear outperformer, with a staggering 16.4% CAGR. This surge speaks to both rising domestic demand and the evolution of India as an auto-export hub.
Machinery (4.8%) and Transport Equipment (1.8%) – Clocking 9.4% and 8.9% CAGR respectively, these reflect capex recovery and public infrastructure tailwinds.
Non-Metallic Minerals (4.1%) – Cement and ceramics have seen 10.9% CAGR, likely driven by housing, highways, and urban development.
Together, these sectors are not just expanding—they’re reshaping India’s industrial base. With global supply chains in flux and India doubling down on self-reliance, the manufacturing revival is real—and broad-based.
As fund managers, we’re watching how this momentum feeds into corporate earnings, capacity additions, and long-term competitiveness.
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