NEW DELHI: India’s manufacturing sector remained resilient in the January-March quarter of 2025-26 despite rising input costs and disruptions linked to the West Asia crisis, with 93 per cent of manufacturers reporting higher or stable production levels, up from 91 per cent in the previous quarter, according to the latest quarterly survey by the Federation of Indian Chambers of Commerce & Industry (Ficci).
The survey, which covered eight major manufacturing sectors and drew responses from both large and micro, small and medium enterprises (MSMEs) with a combined turnover of over ₹8 trillion, said domestic demand conditions also remained steady.
Around 64 per cent of respondents recorded an increase in order book numbers in Q4 of 2025-26 compared to the previous quarter.
Around 80 per cent of respondents expected exports to remain higher or unchanged compared to the corresponding quarter of the previous year, up from 74 per cent in the previous quarter, the survey showed. Hiring intentions also strengthened marginally, with 41 per cent of firms planning to recruit additional workers over the next three months, compared to 38 per cent in the preceding quarter, the survey said.
However, manufacturers reported a sharp increase in cost pressures. Nearly 70 per cent of respondents said production costs as a percentage of sales had increased during the quarter, against 57 per cent in the previous quarter. All respondents reported an increase in production costs due to higher raw material prices and electricity costs, the survey said.
“The increase in cost of production compared to last year is mainly due to higher raw material costs, currency depreciation, and increased logistics, power, and utility costs,” said the survey.
Capacity utilisation moderated slightly during the quarter. Average manufacturing capacity utilisation stood at around 72 per cent, lower than in the previous survey, although the survey noted that the investment outlook for the next six months remained steady. Manufacturers cited geopolitical uncertainty, tariffs, trade restrictions, labour availability concerns, raw material shortages and regulatory challenges as constraints to capacity expansion.
Among sectors, textiles, apparel and technical textiles reported the highest average capacity utilisation at 76.4 per cent, followed by metal and metal products at 76 per cent and automotive and auto components at 75.7 per cent. Electronics and electricals reported one of the lowest utilisation levels at 68 per cent.
The survey also showed that around 86 per cent of respondents expected inventory levels to remain higher or unchanged in Q4 of 2025-26, compared to 89 per cent in the previous quarter.
Source: Business Standard
