India's average manufacturing growth rose from 3.44 per cent during the pre-pandemic period (2016-19) to 4.15 per cent between 2022 and 2025, according to a new study by the Associated Chambers of Commerce and Industry of India (ASSOCHAM). The improvement has moved India from below the global average to almost two percentage points above the world benchmark.
Global supply chain realignment benefits India
The study, titled “Global manufacturing undergoing strategic realignment: India emerges as a key beneficiary of supply chain diversification”, highlights that the post-pandemic world has fundamentally reshaped global manufacturing dynamics. While China remains the world's largest manufacturing economy, new investments are increasingly being spread across multiple countries as global companies adopt China+1, nearshoring and friend-shoring strategies to build more resilient and diversified supply chains.
The analysis covers the world's 10 largest manufacturing economies, which account for nearly 65 per cent of global manufacturing output. It found that India has emerged as one of the "emerging manufacturing leaders" by significantly improving its performance relative to the global average in the post-pandemic period.
India joins league of nations surpassing global benchmark
Before the pandemic, only China, Mexico and Russia recorded manufacturing growth above the global average. In the post-pandemic period, India joined the United States, France, Germany, Italy and the United Kingdom in surpassing the global benchmark.
ASSOCHAM president Nirmal K Minda said companies were no longer focused solely on efficiency, but were placing equal emphasis on resilience and supply chain diversification. He said India’s improved manufacturing performance reflected the impact of sustained reforms and rising investor confidence.
“The opportunity before us is significant, but the next phase must focus on implementation, scale and creating globally competitive manufacturing ecosystems that can make India a preferred partner in global value chains,” Minda said.
Structural strengths driving India's manufacturing rise
The report attributes India's rise to several structural strengths, including expanding domestic demand, robust infrastructure development, improved logistics, growing investor confidence driven by the China+1 strategy, and proactive government initiatives such as the Production Linked Incentive (PLI) scheme, industrial corridor development, PM Gati Shakti and other manufacturing-focused reforms.
