‘India has failed in manufacturing’: Expert urges Centre, state govts to do this to boost production

India’s manufacturing sector continues to show growth in absolute terms, yet significant challenges remain in its distribution and per capita output. Market expert D Muthukrishnan Monday underscored the uneven spread of manufacturing activity across the country.

According to the data shared, just five states—Tamil Nadu, Maharashtra, Gujarat, Uttar Pradesh, and Karnataka—account for 52% of all factories in India. Tamil Nadu leads with a 16% share, indicating a high regional concentration of industrial activity. This imbalance raises concerns over equitable industrial growth and the need for manufacturing expansion to other parts of the country.

Muthukrishnan also shared World Bank figures on manufacturing to highlight where India stands globally. The World Bank’s 2024 normalized estimates rank India as the sixth-largest manufacturing nation, with a value-added capacity of $450 billion. While this places India among global leaders, the gap with China, which tops the list with $5.04 trillion, remains substantial. The United States follows at $2.60 trillion, with Japan, Germany, and South Korea rounding out the top five.

Despite its absolute ranking, India lags behind significantly in per capita manufacturing output. India’s per capita manufacturing output stands at just $318, a fraction of China’s $3,569 and the US’s $7,834. Even emerging economies such as Brazil fare better, with a per capita output of $1,161, while Germany leads at $10,704.

"As a country, we've failed in manufacturing. Just 5 states have 52% of all factories in India with Tamil Nadu topping at 16%. Manufacturing need to spread far and wide. Both the centre and all the states needs to be obsessed about manufacturing," Muthukrishnan tweeted.

The disparity in India’s manufacturing footprint highlights an urgent need for policy-driven expansion across more states. Experts argue that both the central and state governments must prioritize industrial growth in underdeveloped regions, ensuring a more balanced and inclusive economic development.

The data paints a clear picture: while India’s manufacturing sector is growing, it must become more geographically diverse and increase its efficiency to compete on a global scale. A renewed focus on infrastructure, skill development, and industrial incentives could pave the way for a more equitable and robust manufacturing landscape.