Just 5 States Account For More Than Half Of India's Manufacturing Output And Employment

New Delhi: Even eight decades after India gained independence and started governing its own destiny, industrial development continues to be highly skewed. According to data from the Annual Survey of Industry 2024-25 released by the Ministry of Statistics and Programme Implementation (MOSPI), just five states dominate the industrial landscape of the country.

Despite decades of policy push to deepen and widen India's manufacturing footprint, just five states -- Maharashtra, Gujarat, Tamil Nadu, Karnataka and Uttar Pradesh -- dominate industrial manufacturing landscape. Together, these five states account for more than half the number of industrial establishment, more than half the gross value added (GVA) and importantly, more than half the employment in the manufacturing sector in the country.

The highest number of establishments were reported in Tamil Nadu (41,221), followed by Gujarat (33,084) and Maharashtra(27,379). However, Maharashtra and Gujarat had higher value added share, due to a dominance of larger scale industries. Tamil Nadu has a higher share of small and medium scale industrial establishments.

Maharashtra led States with the highest GVA: In terms of individual share of States in all India GVA, with a share of 15.92 percent in 2024-25, although this marked a marginal decline from the previous year. Maharashtra was followed by Gujarat, Tamil Nadu, Karnataka and Uttar Pradesh. Amongst the top performing states, only Tamil Nadu recorded an increase in both GVA and number of establishments as compared to the previous year.

Collectively, these five States accounted for more than 54 percent of the total manufacturing Gross Value Added of the country. These five States also accounted for 53.30 percent of total establishments at all India level.

It must be noted here that the ASI is a sample survey. Samples were drawn considering an average sampling fraction for the sample sector as 7.5% in ASI 2024-25. From the list Frame size of 2,68,778 registered industrial units, central samples of size 86,547 units consisting of 66,453 Census scheme units and 20,094 Sample scheme units were selected for survey. The results of ASI 2024- 25 are based on these 86,547 surveyed units.

Overall, the survey points to solid growth in industrial output and employment. According to the ASI, the number of people working in industries increased dramatically from 1.96 crore in 2023–2024 to 2.10 crore in 2024–2025, a 7.19 percent increase. In comparison to 2023–2024, the total compensation paid to employees grew by 12.08 percent in 2024–2025. The total number of establishments i increased from 2.60 lakhs in ASI 2023-24 to 2.67 lakhs in ASI 2024-25, representing a growth of 2.64 percent.

During the same period, Gross Value Added increased from Rs 2.458.3 lakh crore to Rs 2,694.2 lakh crore, indicating a growth of over 9.5 percent in industrial value addition.

Sector wise employment

The registered manufacturing sector's employment growth persisted. From 1.96 crore in ASI 2023–2024 to 2.10 crore in 2024–2025, the expected number of people involved showed a notable increase of 7.19%.

In 2024–25, the food-products industry engaged the highest number of people at 2,361 thousand, followed by textiles at 1,757 thousand and basic metals at 1,582 thousand, while pharmaceutical products engaged the fewest at 1,092 thousand.

The estimates from ASI 2024-25 indicate a broad-based expansion in the registered manufacturing sector, with growth recorded across all major indicators, the Survey noted. . The number of factories has increased by 2.64 per cent, while the number of factories in operation grew 2.61 per cent as compared to the previous year. Investment related indicators have showed stronger growth, with fixed capital rising by 10.54 per cent and invested capital by 11.10 per cent in comparison with ASI 2023-24.

"As a general view, these movements of indicators suggest towards continued expansion in industrial activity, supported by higher investment, employment growth and value addition," the report concluded.

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