The Ministry of Statistics and Programme Implementation (MoSPI) released the Annual Survey of Industries (ASI) for 2023–24, providing comprehensive insights into the performance, employment trends, and sectoral dynamics of India’s industrial sector. The survey, conducted by the National Statistical Office (NSO), covers factories registered under the Factories Act, 1948, bidi and cigar units under the Bidi & Cigar Workers Act, 1966, electricity undertakings not registered with the Central Electricity Authority, and large establishments with 100 or more employees listed in state Business Registers of Establishments. ASI is a crucial tool for policymakers, providing reliable data on industrial output, value addition, employment, and wages, which helps in framing industrial and economic policies.
According to the 2023–24 ASI data, the industrial sector’s Gross Value Added (GVA) grew by 11.89%, significantly higher than the growth in output (5.80%) and input (4.71%). This divergence indicates a rise in efficiency, with industries generating higher value per unit of input, reflecting better productivity and resource utilization. GVA growth demonstrates that the sector is not just expanding in scale but is also adding meaningful value, contributing more effectively to the national economy.
The growth in GVA was primarily driven by industries such as basic metals, motor vehicles, chemicals, food products, and pharmaceuticals. These industries are notable for being both export-oriented and labor-intensive, combining employment generation with international competitiveness. Collectively, these sectors accounted for nearly 48% of total industrial output, underscoring their central role in driving industrial growth. The performance of these industries reflects a shift toward sectors with higher value addition potential, aligning with India’s strategy to enhance manufacturing exports and technological sophistication.
Industrial activity remains geographically concentrated. The top five states contributing to industrial GVA were Maharashtra (16%), Gujarat (14%), Tamil Nadu (10%), Karnataka (7%), and Uttar Pradesh (7%). These states benefit from robust infrastructure, skilled labor availability, and policy incentives, which have made them attractive for both domestic and foreign investments. The concentration also highlights the need for balanced regional industrial growth initiatives, including industrial corridors and smart city development.
The industrial sector’s employment increased by 5.92% year-on-year, reflecting that industrial growth is translating into job creation. Over the last decade (2014–15 to 2023–24), the sector generated approximately 57 lakh jobs, highlighting its importance in inclusive economic development. The average emoluments of workers rose by 5.6%, keeping pace with output growth, although wage growth still lags behind GVA growth. This indicates that while productivity is rising, there is a need to ensure equitable income distribution to strengthen consumption and labor welfare. The states leading in employment mirrored the GVA rankings: Tamil Nadu, Gujarat, Maharashtra, Uttar Pradesh, and Karnataka.
The ASI highlights several opportunities for India’s industrial sector. Manufacturing’s contribution to GDP stands at 17%, which, along with a 4% growth in the All India Index of Industrial Production (IIP) in August 2025, underscores the sector’s potential to accelerate overall economic growth. India’s attractiveness as a global investment destination is evident from USD 81.04 billion in FDI during FY 2024–25, with an 18% increase in manufacturing FDI. Modernization in electronics, pharmaceuticals, automotive, and textiles opens avenues for higher value addition and global competitiveness. Policy initiatives such as the Production Linked Incentive (PLI) scheme, GST reforms, National Manufacturing Mission, and PM MITRA parks further facilitate industrial scaling, innovation, and export promotion. Workforce upskilling through Pradhan Mantri Kaushal Vikas Yojana (PMKVY) and youth-centric employment programs enhances inclusive job creation, while the push for green manufacturing and renewable energy adoption aligns India with global sustainability trends, opening new markets.
Despite these opportunities, India’s industrial sector faces multiple challenges. Infrastructure bottlenecks—including deficiencies in logistics, power, water, ports, and warehousing—continue to limit efficiency. Micro, Small, and Medium Enterprises (MSMEs) face credit gaps and high borrowing costs, which constrains their growth and technology adoption. Globally, low-cost competitors like China and Vietnam challenge Indian manufacturers, compounded by limited R&D and design capabilities. Unequal adoption of Industry 4.0 technologies, especially among MSMEs, and concerns over automation-related job displacement further slow technological modernization. Trade barriers, tariff increases (e.g., US tariffs on Indian exports), and cautious Free Trade Agreements (FTAs) affect competitiveness. Workforce skill gaps remain significant, with only 4.7% formally trained, limiting advanced technology integration. Additionally, environmental regulations and net-zero commitments raise production costs, posing challenges in balancing sustainability with competitiveness.
To sustain and accelerate industrial growth, India must adopt a multi-pronged approach. Expanding Strategic Industrial Corridors and Smart Cities enhances connectivity, reduces logistics costs, and promotes balanced regional growth. Mission-driven initiatives like the National Manufacturing Mission, Make in India, and Atmanirbhar Bharat can prioritize sectors such as electronics, EV batteries, pharmaceuticals, textiles, and renewable energy, supported by fiscal incentives and global linkages. Workforce readiness through skill development programs is crucial for bridging technical expertise gaps. Financial inclusion and MSME support, via credit guarantee schemes, faster GST refunds, and startup incentives, are essential for scaling operations and integrating SMEs into global value chains. Sustainability efforts, such as promoting renewable energy, circular economy practices, and compliance with global standards like the EU Carbon Border Adjustment Mechanism (CBAM), enhance India’s global competitiveness. Lessons from global best practices, such as Japan’s cluster-based industrialization model, can be applied to strengthen manufacturing ecosystems and export integration.
The Annual Survey of Industries (ASI) is the primary source of industrial statistics in India. It provides comprehensive data on various aspects of the industrial sector, including output, value added, employment, capital formation, and structural changes. This survey plays a crucial role in policymaking, economic analysis, and monitoring industrial performance across the country.
The ASI is conducted under the Collection of Statistics (Amendment) Act, 2017, ensuring that the data collection process is legally backed and standardized. The survey is released and administered by the Ministry of Statistics and Programme Implementation (MoSPI) through the Industrial Statistics Wing of the National Sample Survey Office (NSSO). This wing is responsible for planning, coordinating, and compiling the data to maintain the accuracy and reliability of industrial statistics.
The survey serves multiple purposes. It provides detailed data on industrial output and value addition, enabling analysis of productivity and efficiency in different sectors. Employment patterns, capital formation, and investment trends are also monitored through ASI. Furthermore, it helps identify structural changes in the industrial landscape, such as shifts in sectoral contributions or growth trends, which are essential for economic planning and policy formulation.
The ASI primarily covers factories and industrial units specified under various acts. Included establishments are:
Factories under the Factories Act, 1948 (sections 2m(i) and 2m(ii)).
Bidi and cigar manufacturing units, governed by the Bidi & Cigar Workers (Conditions of Employment) Act, 1966.
Electricity undertakings that are not registered with the Central Electricity Authority (CEA).
Industrial units employing 100 or more workers, identified through the Basic Records of Establishments (BRE) maintained by states.
On the other hand, certain establishments are excluded from ASI coverage:
Defence establishments and oil storage and distribution depots.
Departmental units, such as railway workshops.
Gas storage units.
This selective coverage ensures that ASI focuses on organized industrial units with substantial economic activity while excluding specialized or non-commercial units.
The ASI 2023–24 underscores that India’s industrial sector is on a strong growth trajectory, driven by efficiency gains, modernized industries, employment growth, and export potential. While challenges remain in infrastructure, skill development, technology adoption, and global competitiveness, India’s policy initiatives, FDI inflows, and sustainability focus provide a solid foundation for long-term growth. As India aims for a USD 35 trillion economy by 2047, manufacturing will act as a key engine of growth, positioning India not just as the “factory of the world,” but also as a global hub for innovation, sustainability, and industrial leadership.
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