Manufacturing figures vary across reports, raising questions over the data used to measure India’s industrial progress (Photo: Media India Group)
India’s manufacturing narrative is being built around numbers that do not always match the country’s latest official statistics. Several prominent banks, financial institutions and consulting organisations continue to cite manufacturing’s contribution at around 16-17 pc, even though the latest national accounts released by the Ministry of Statistics and Programme Implementation (MoSPI) put the sector’s share at around 15 pc of nominal Gross Value Added (GVA).
“When the statistical base changes, previously reported sectoral shares need to be re-examined before they are carried forward into new forecasts. Otherwise, an older ratio can continue to circulate long after the underlying methodology has changed,” Nidhi Gupta, a Mumbai-based Economist tells Media India Group.
One of the latest examples is BofA Securities, part of Bank of America, a leading financial services firm of the United States, which says India needs to sustain manufacturing growth of around 10 pc annually for the next 15 years to increase manufacturing’s share to 25 pc by 2040. The institution estimates that manufacturing output could rise from around USD 500 billion in 2024 to nearly USD 2.3 trillion by 2040.
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But BofA’s calculation uses a manufacturing share of around 17 pc as its current starting point.
That figure becomes questionable when compared with India’s latest official data. A new GDP series, introduced by the Ministry of Statistics and Programme Implementation (MoSPI) with 2022-23 as the base year, puts manufacturing at around 15 pc of nominal GVA in FY2025–26. The new series also introduced significant methodological changes, including double deflation for manufacturing.
“The difference may look small in percentage-point terms, but it matters when the number is being used as the starting point for a long-term policy or investment projection. A different base can materially change the scale of the gap that needs to be bridged,” says Gupta.
The discrepancy is not limited to BofA. DBS Bank, a Singaporean bank, in a 2025 report, cited manufacturing’s share at around 17 pc and projected that it could reach 25 pc by 2047. BCG and Z47 also used a figure of around 17 pc in their December 2025 report on India’s manufacturing sector.
C S Setty, Chairman of the State Bank of India (SBI) has similarly referred to manufacturing contributing around 17 pc while discussing the ambition of taking its share to at least 25 pc.
India’s planning organisation, NITI Aayog, has also described India’s manufacturing contribution as being in the 15-17 pc range in its manufacturing roadmap.
The question, therefore, is not simply whether these institutions have made optimistic forecasts. It is which number they are using, where it comes from and whether it remains valid after India revised its national accounts.
A report published before the introduction of the new GDP series can legitimately rely on the previous statistical framework. However, institutions issuing new reports or making current statements need to explain whether their numbers have been updated.
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The distinction is particularly important because manufacturing’s share can be calculated against GDP or GVA, and using nominal or real values can produce different results. A figure can therefore appear contradictory without necessarily being fabricated.
“There is a difference between saying manufacturing accounts for a certain share of nominal GVA and using manufacturing’s share in GDP or in real terms. These figures should not be treated as interchangeable, and research reports need to make that distinction clear,” adds Gupta.
But failing to disclose the methodology can make an old or differently calculated number appear to be a current official statistic.
The issue becomes more significant because these figures are subsequently reproduced across financial media, investor presentations, research reports and policy discussions, giving the 16-17 pc figure a wider circulation and an appearance of consensus.
Meanwhile, the latest official data show manufacturing GVA growing 9.2 pc in Q1 FY2026-27. Strong growth, however, does not automatically mean that manufacturing’s share of the economy has risen proportionately.
“A high growth rate in manufacturing and a rising manufacturing share are two different indicators. The sector can grow rapidly while its share of total GVA changes only modestly, depending on how other sectors perform,” she adds.
For institutions projecting a jump from around 17 pc to 25 pc, the starting number is therefore critical. A higher starting point makes the distance to the government’s 25 pc target appear smaller than it would be if the latest official share of around 15 pc is used.
For a sector that has been at the centre of India’s economic policy for more than a decade, the first requirement for measuring progress is simple: everyone needs to be working with the same numbers.
