Industry

Industry holds a prominent position in the Indian economy, accounting for 31 per cent of GDP, on average, during FY12 and FY21 and employing over 12.1 crore people.

• In FY23, the Industry sector witnessed modest growth of 4.1 per cent compared to the strong growth of 10.3 per cent in FY22.
• This is likely on account of input cost-push pressures, supply chain disruptions and the China lockdown impacting the availability of essential inputs and slowing the global economy.

Credit to Industry

• Growth in bank credit has kept pace with industrial growth, with a sequential surge evident since January 2022.
• A large share of bank credit continues to be assigned to large industries, credit to MSMEs has also seen a significant increase in part assisted by the introduction of the ECLGS, which supports around 1.2 crore businesses of which 95 per cent are MSMEs.
• Annual FDI equity inflows in the manufacturing sector have been steadily increasing over the last few years. It jumped from US$ 12.1 billion in FY21 to US$ 21.3 billion in FY22 as the pandemic-driven expansionary policies of advanced economies led to a surge in global liquidity.

MSME

• While the contribution of the MSME sector to overall GVA rose from 29.3 per cent in FY18 to 30.5 per cent in FY20, the economic impact of the pandemic caused the sector’s share to fall to 26.8 per cent in FY21.
• MSME contribution to the manufacturing sector’s GVA also marginally fell to 36.0 per cent in FY21.

Electronic Industry

• The domestic electronics industry, as of FY20, is valued at US$118 billion. India aims to reach US$300 billion worth of electronics manufacturing and US$ 120 billion in exports by FY26, supported by the vision of a US$ 1 trillion digital economy by 2025.

Steel Industry

• The country is now a global force in steel production and the 2^nd largest crude steel producer in the world.
• The steel sector’s performance in the current fiscal year has been robust, with cumulative production and consumption of finished steel at 88 MT and 86 MT, respectively, during April-December 2022, higher than the corresponding period during the previous four years.
• The growth in finished steel production is aided by double-digit growth in consumption (11 per cent on a YoY basis), bolstered by a pick-up in the infrastructure sector significantly driven by increased Capex of the government.

Textile Industry

• The Textile industry is one of the country’s most significant sources of employment generation, with an estimated 4.5 crore people directly engaged in this sector, including a large number of women and the rural population.
• In the current financial year, the textile industry has been facing the challenge of moderating exports compared to FY22.

Pharmaceuticals Industry

• The Indian Pharmaceuticals industry plays a prominent role in the global pharmaceuticals industry. India’s domestic pharmaceutical market is estimated at US$ 41 billion in 2021 and is likely to grow to US$ 65 billion by 2024 and is further expected to reach US$ 130 billion by 2030.
• India is ranked 3^rd worldwide in the production of pharma products by volume and 14th by value.
• The nation is the largest provider of generic medicines globally, occupying a 20 per cent share in global supply by volume, and is the leading vaccine manufacturer globally with a market share of 60 per cent.
• Indian pharmaceutical exports achieved a healthy growth of 24 per cent in FY21, driven by Covid-19-induced demand for critical drugs and other supplies made to over 150 countries.

Automobile Industry

• The automobile sector is a key driver of India’s economic growth.
• In December 2022, India became the 3rd largest automobile market, surpassing Japan and Germany in terms of sales.
• In 2021, India was the largest manufacturer of two-wheeler and three-wheeler vehicles and the world’s fourth-largest manufacturer of passenger cars.
• The sector’s importance is gauged by the fact that it contributes 7.1 per cent to the overall GDP and 49 per cent to the manufacturing GDP while generating direct and indirect employment of 3.7 crore at the end of 2021.

Innovation

• The government has also strengthened its IPR regime by modernising the IP office, reducing legal compliances and facilitating IP filing for start-ups, women entrepreneurs, small industries and others.
• This has resulted in a 46 per cent growth in the domestic filing of patents over 2016-2021, signalling India’s transition towards a knowledge-based economy.
• The Global Innovation Index (GII) ranks the countries based on innovation performance, comprising around 80 indicators, including measures on the political environment, education, infrastructure and knowledge creation of each economy.
• As per the GII 2022 report, India entered the top 40 innovating countries for the first time in 2022 since the inception of the GII in 2007 by improving its rank from 81 in 2015 to 40 in 2022.