Manufacturing has played a shrinking role in most industrialised states in India
The share of manufacturing in India's gross domestic product is declining, both at the national level, and within most key states, except Gujarat.
Three sectors together make up the domestic product of a state or a country - agriculture, manufacturing and services. From being an agriculture-led country, India's workforce has steadily moved away from farming. While agriculture still contributes a large share of the economy of the less developed states, manufacturing and services began to drive growth in the more developed states since the 2000s.
However, the growth of manufacturing appears to have stagnated or declined in India, and in most of these states. Manufacturing contributed more than 16% of India's GDP in the 2000s and early 2010s, but by 2024, it contributed less than 13% of value added to India's gross domestic product.
Within India, manufacturing is dispersed across the country, but is concentrated among a few large states, where its contribution to the economy is higher than the national average. These states are known as India's industrialised states, and include Karnataka, Maharashtra, Haryana, Tamil Nadu and Gujarat.
In the early 2010s, manufacturing accounted for 18-24% of the GDP of these five states. By 2024, it had fallen to 13-18% in four of the five states. The share of services grew faster in these states during this period.
Gujarat is the only standout, with the share of manufacturing in its GDP having steadily increased, and is now at 35%.
Read more about the economies of Indian states.
