India’s manufacturing sector is experiencing a significant boost, underpinned by a robust wave of infrastructure projects across the country. In 2025, government-backed initiatives such as Bharatmala, Sagarmala, Dedicated Freight Corridors (DFC), and National Industrial Corridor Development (NICD) are not just building roads and ports but are strategically cushioning and accelerating manufacturing growth, enabling India’s rise as a global manufacturing powerhouse.
Infrastructure Boost Translates to Confidence and Expansion
According to the Cushman & Wakefield report, an impressive 88% of manufacturing companies report scaling up operations, directly influenced by recent infrastructure developments. About 95% of respondents have witnessed improved access to logistics, transport corridors, and industrial zones, which significantly lower operational costs and lead times.
Large enterprises are at the forefront, with 94% acknowledging infrastructure upgrades as pivotal for expansion, while MSMEs also benefit from improved connectivity and plug-and-play industrial parks that cut setup time and capital expenditure.
In FY25, the government’s capital expenditure on infrastructure stands at ₹11.11 lakh crore, accounting for about 3.4% of GDP, as outlined in the Union Budget 2025–26 and related official reports. This marks an increase from ₹10 lakh crore in FY24 and covers investments across key sectors, including roads, railways, urban infrastructure, ports, airports, and affordable housing schemes such as PMAY.
Infrastructure spending generates a significant multiplier effect, directly stimulating demand in steel, cement, machinery, and capital goods. According to industry bodies like CII and ASSOCHAM, every ₹1 invested in infrastructure contributes approximately ₹2.5–3 in economic output. On an annual basis, infrastructure-driven demand for capital goods, construction equipment, and building materials is estimated at around ₹4–5 lakh crore, supporting GDP growth, industrial activity, and employment generation.
Strategic Projects Leading the Charge
India’s infrastructure growth is propelled by several mega initiatives, including:
• Bharatmala is focused on highway development and improving freight movement across the nation.
• Sagarmala enhances port infrastructure and inland waterways, integrating maritime logistics with manufacturing clusters.
• The Dedicated Freight Corridors (DFC) enable faster cargo movement, reducing bottlenecks.
• The National Industrial Corridor Development Corporation (NICDC) oversees 11 industrial corridors, developing over 32 smart nodal points with world-class facilities.
These projects collectively reduce logistics costs, attract investment, and make manufacturing hubs more efficient. For example, plug-and-play industrial parks, fully serviced zones with power, water, and digital infrastructure, have become vital, especially for MSMEs. The Union Budget 2025-26 allocated more than ₹2,500 crore specifically for developing 12 such sector-specific parks, underscoring their importance.
Manufacturing Growth Indicators
India’s manufacturing output is steadily rising. As per the latest Index of Industrial Production (IIP) data in 2025, manufacturing grew by around 4% in August 2025, with significant gains in the manufacturing of electrical equipment (+15.9%) and basic metals (+12.7%). This momentum builds on recent years where manufacturing output rose from 1.9% in 2024 to over 4% in mid-2025, signalling structural shifts supported by infrastructure and government policies like Production Linked Incentives (PLI).
Addressing Challenges and Sustaining Growth
Despite these successes, challenges remain. Logistics cost reduction, faster land aggregation for industrial parks, and enhanced MSME productivity are critical to sustain growth. Skill development and export facilitation through unified digital platforms are key strategic priorities.
Industry leaders emphasise the need for continuity in infrastructure creation, policy clarity, and private sector engagement to maintain manufacturing momentum in the face of global supply chain shifts.
Infrastructure projects stand as the backbone, cushioning India’s manufacturing growth. By reducing costs, enabling faster market access, and providing ready-to-use industrial zones, these developments empower manufacturers, especially MSMEs, to scale efficiently and compete globally. As India pushes toward becoming a $5 trillion economy, infrastructure-led growth will remain a powerful lever for industrial transformation and economic resilience.
According to CMIE and MoLE reports, FY25 saw over 1–1.2 million new jobs created across manufacturing, construction, logistics, and engineering services, driven largely by infrastructure and industrial expansion projects such as Bharatmala, Sagarmala, metro rail developments, and National Industrial Corridors, with employment spanning skilled, semi-skilled, and unskilled categories.
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