Manufacturing to Account for Fifth of India’s GDP by 2030: Equirus Report
India’s manufacturing sector is set for a major transformation, with its share of GDP projected to nearly double by 2030, according to a new Industrial Outlook Report by Equirus Capital, one of India’s leading investment banking and financial services powerhouse. The report highlights India’s shift from post-COVID manufacturing caution to a strong investment-led industrial upcycle marking one of the strongest industrial recoveries in recent decades.
Manufacturing to Nearly Double by 2030
Equirus Capital estimates that manufacturing’s contribution to India’s GDP will rise from 13% of GDP in FY2025 to 20% of a much higher basein FY2030, driven by rising demand, policy reforms and normalised global supply chains (see graph below).
Manufacturing will account for a fifth of Indian GDP in 2030 driven by better integration of India into global supply chains, policy support, and continued long-term trend to diversify away from China. “The sector has laid a strong foundation for steady expansion and barring geo-political complications leading to increase in tariff and non-tariff barriers, Indian corporates will witness extremely high growth over the next five years. Reforms such as PLI, Gati Shakti, and infrastructure expansion schemes have positioned manufacturing as a core growth pillar — laying the groundwork for a sustained capex cycle and deeper structural gains over the coming years and we expect government to double down on such reforms to support employment,” said Munish Aggarwal, Managing Director and Sector Lead Industrials, Equirus Capital.
Capital Markets Reflect Strong Industrial Optimism
This optimism is reflected in market performance: the BSE Industrials Index has outperformed the Sensex and other sectoral indices (FMCG, Healthcare, IT, Financial Services) since July 2022 (see graph below).
IPO activity has surged
Industrial sector fundraising also saw a dramatic revival.
"FY 2025 saw a five-year high in terms of industrial firms IPOs seeing 32 listings a significant increase even from the pre-COVID era. Even in terms of amounts raised FY25 was the strongest year on record with Rs 663.2 billion raised via industrial IPOs vs 170 billion in FY24," said Aggarwal.
Momentum has remained strong in FY26 (YTD), with industrials' share of IPO volumes rising to ~40% from ~30% last year. M&A and PE investments have also surged to a five-year high of ?1,432.8 billion, up from ?508.2 billion in 2020 and ?807.3 billion in 2024.
"We expect the broader theme of M&A-led consolidation to shape the next phase of growth across the EV, electronics, and cement sectors, while PE interest is likely to remain strong in packaging, aerospace, and defence through FY30. ,"
Three Industrial Themes to Watch
The report identifies three industrial sub-sectors poised for maximum deals potential through 2030:
- Aerospace & Defence — fastest-growing PE/VC theme (~100% CAGR).
- Renewables, Electric Vehicles & Batteries — major capital magnet fuelled by PM E-DRIVE, PLI, and clean-tech demand.
- Automation, robotics and AI integration — will witness integration of deep-tech and machine learning across segment of industrials with increased adoption of robotics even across smaller manufacturing set-ups.
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“India’s next wave of industrial acceleration will be powered by new-age manufacturing sectors, supporting the nation’s ambition of achieving a USD 7.3 trillion economy by 2030,” said Aggarwal.
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