India’s manufacturing sector is poised for a major shift, with its share of GDP projected to rise from 13 per cent in FY2025 to 20 per cent by FY2030, according to Equirus Capital’s latest Industrial Outlook Report. The study notes that India is transitioning from post-pandemic caution to one of the strongest investment-led industrial recoveries in recent decades.

Equirus attributes this expansion to stronger integration into global supply chains, diversification away from China, and sustained policy support through initiatives such as the Production-Linked Incentive scheme, Gati Shakti and ongoing infrastructure expansion. Munish Aggarwal, Managing Director and Sector Lead – Industrials, said India has built a strong foundation for long-term industrial growth and is likely to see accelerated corporate capex, provided global trade tensions do not escalate.

Signs of this confidence are evident in capital markets. The BSE Industrials Index has outperformed the Sensex and key sectoral indices since July 2022. FY2025 marked a five-year high for industrial IPOs with 32 listings, raising Rs 663.2 billion compared with Rs 170 billion in FY2024. The momentum has continued into FY2026, with industrials accounting for nearly 40 per cent of IPO volumes so far.

M&A and private equity activity has also strengthened, reaching a five-year high of Rs 1,432.8 billion, up from Rs 508.2 billion in 2020 and Rs 807.3 billion in 2024. Aggarwal expects consolidation to drive the next phase of growth in sectors such as EVs, electronics and cement, while private equity interest is likely to remain strong in packaging, aerospace and defence.

The report highlights three industrial themes that offer the highest deal potential through 2030: aerospace and defence with rapid PE/VC growth; renewables, electric vehicles and battery technologies supported by PM E-DRIVE and PLI schemes; and automation, robotics and AI integration across manufacturing units, including smaller plants.

Aggarwal said these new-age industrial sectors will play a pivotal role in propelling India towards its target of becoming a USD 7.3 trillion economy by 2030.