India's registered manufacturing sector achieved a historic milestone in FY25, with factory employment crossing the 20 million mark for the first time, according to the latest Annual Survey of Industries (ASI) released by the Ministry of Statistics and Programme Implementation on Wednesday. The sector recorded 7.2% growth, adding 1.41 million jobs, as reported by the Ministry. However, gross fixed capital formation (GFCF) fell 8% to ₹63,497 crore in FY25, marking the first decline since the pandemic year FY21 after rising 77% in FY23 and 18% in FY24, as per the Business Standard. Over the five-year period from 2020-21 to 2024-25, factory employment has grown by approximately 4.9 million, representing a 30.5% increase from the pandemic-hit 16.09 million in 2020-21. The data, however, comes with a time lag as the reference period was April 2024-March 2025, while fieldwork was carried out between October 2025 and June 2026.
The employment growth was accompanied by robust production performance, with factory output growing 7.8% to ₹165.24 trillion, significantly higher than the 5.8% growth recorded in the previous year, as reported by the Ministry. Gross value added (GVA) rose 9.59% to ₹26.94 trillion, up from ₹24.58 trillion in FY24, while total output rose to around ₹165.24 lakh crore from ₹153.27 lakh crore. Industrial output grew 7.81% during FY25, while fixed capital increased 10.54% to ₹51.12 trillion. Total emoluments paid to employees rose 12.08%, demonstrating strong compensation growth compared to previous years. The Ministry noted that invested capital, which includes fixed capital and physical working capital, rose 11.1% in FY25 to ₹75.56 lakh crore, marking the quickest pace of growth since FY17. The combination of employment expansion, increased output, and higher employee compensation shows that the registered manufacturing expansion was not confined to higher production alone, but was accompanied by broad-based growth across multiple economic indicators.
The total wage bill grew faster than the workforce expansion, with total emoluments rising 12.08% in FY25, up from 11.86% in the previous year, according to the Ministry. Wages paid specifically to workers increased by around 13%, demonstrating strong compensation growth compared to 12% in FY24. However, individual wage growth was more modest, with average wage per worker increasing 5.3% to approximately ₹2.28 lakh annually, compared to 5.5% growth in FY24. Emoluments per person engaged rose 4.6% to ₹3.82 lakh, lower than 5.6% in FY24. Workers accounted for about 80% of the 1.41 million increase in total persons engaged, with the remaining growth coming from other employee categories including supervisory and managerial staff. The increase in capital formation was accompanied by higher profitability, with net income rising 9.68% and net profit 7.73% during FY25. Profit per factory grew 5% in FY25 to ₹4.33 crore, while wages per worker grew 5.3% to ₹2.28 lakh, marking a reversal from FY24 when profit growth outpaced wage growth.
Tamil Nadu remained the largest factory employer but saw its share of national employment decline to 14.99% from 15.24% in FY24, as reported by the Ministry. Together with Maharashtra, Gujarat, Uttar Pradesh, and Haryana, the top five states accounted for about 56% of manufacturing employment. By industry, food products remained the biggest employer with 2.36 million people (11.2% of total). Textile followed with 1.76 million employees, followed by basic metal (1.58 million), motor vehicle (1.48 million), and wearing apparel (1.46 million). Five industries—basic metals, motor vehicles, chemicals and chemical products, pharmaceutical products and food products—together accounted for more than 45% of manufacturing GVA in FY25. The number of registered manufacturing establishments rose 2.64% to 267,000 in FY25 from 260,000 in FY24, with Tamil Nadu having the highest number at 41,221 establishments. The highest number of establishments were reported in Tamil Nadu at 41,221, followed by Gujarat at 33,084, and Maharashtra with 27,379 factories.
Gross fixed capital formation fell 8% to ₹63,497 crore in FY25, marking the first decline since the pandemic year FY21 after rising 77% in FY23 and 18% in FY24, as per the Business Standard. Fixed capital per worker grew 3.1%, about half of FY24's 5.9% pace, indicating that factories mostly grew by adding people to existing capacity rather than building new capacity. Worker productivity showed concerning trends, with output per worker falling 0.4% in FY24 and creeping up just 0.5% in FY25 — the only two-year stretch in the ASI's record since 1981-82 this close to zero in both consecutive years. This represents a significant slowdown from productivity growth of 25.3% in FY22 and 13.1% in FY23. Madan Sabnavis, chief economist at Bank of Baroda, attributed the investment slowdown to private sector slowing down, particularly in the consumer goods segment due to inflation and demand pressures. He also noted the lumpy nature of capital expenditure in infrastructure-linked sectors such as steel and power, where investment tends to come in bursts rather than annually.
Several states witnessed higher wage increases than the national average increase in emoluments per person engaged of 4.6%, according to the Business Standard. Sikkim led with 47.7% wage growth, followed by Tripura (15%), Bihar (12%), Chhattisgarh (9%), and Telangana (8.9%). Odisha remained the best-performing state by output per person engaged in FY25, at ₹1.42 crore, followed by Sikkim (₹1.29 crore), Chhattisgarh (₹1.1 crore), Jharkhand (₹1.04 crore), and Gujarat (₹1.03 crore). The survey covers 86,547 units with fieldwork conducted between October 2025 and June this year, following an establishment-based approach and using record-based information collected through a dedicated web portal. The FY25 results provide crucial insights into India's manufacturing industries in terms of output, employment, and capital formation, feeding into national and state-level accounts.
