3 articles · Updated · The Indian Express · Jul 21
Summary
UNIDO data for Q1 2026 showed India’s manufacturing output rising 2.5% quarter on quarter, ahead of China’s 1.8%, underscoring India’s faster near-term industrial momentum.
That lead comes from a much smaller base: China’s 2025 manufacturing output reached $4.82 trillion versus India’s $532.92 billion, and China accounted for 27.4% of global manufacturing value added against India’s 3%.
India has expanded electronics production sharply—from about Rs 1.9 lakh crore in 2014-15 to Rs 11.3 lakh crore in 2024-25—and is now the world’s second-largest mobile phone manufacturer, but much of that growth remains assembly-led.
New Delhi is still pushing to deepen the sector, recently approving a Dixon Technologies-Vivo joint venture and waiving customs duty on 85 manufacturing inputs, even as analysts argue India must build domestic components, machinery and supplier networks rather than copy China’s model.
Can India achieve self-reliance by deepening manufacturing ties with its main strategic competitor, China?
Will India's new incentives build a deep domestic supply chain or just subsidize more foreign-led assembly?
As India courts Chinese tech, what safeguards protect its long-term economic and national security interests?
India Outpaces China in Q1 2026 Manufacturing Growth: Scale, Drivers, and Strategic Lessons
Overview
In the first quarter of 2026, India's manufacturing sector grew by 2.5%, outpacing China's 1.8% growth and signaling a notable shift in industrial momentum. Although India's manufacturing base is much smaller than China's—$532.92 billion compared to $4.82 trillion in 2025—this faster growth highlights significant acceleration for India. The report emphasizes that India's higher growth rate comes from a lower starting point, but it marks an important change in the country's industrial output and competitiveness. This development suggests India is gaining ground, even as China remains the global manufacturing leader by scale.