Manufacturing has long been considered the biggest engine of growth, employment and exports in the Indian economy. In the Union Budget (year 2026-27) presented in Parliament on February 1, the government has decided to work more in this direction. Now necessary tools and resources will be given to work faster in this sector. Especially sectors like electronics, textile, semiconductor, biopharma, chemicals, capital goods, containers, rare earth and MSME have been targeted. In the Union Budget, Finance Minister Nirmala Sitharaman has made provision for Capex i.e. capital expenditure of Rs 12.2 lakh crore to boost these sectors.
Come, on this pretext, let us know which are the top 10 sectors in the country at present, where India is setting a flag in the country and the world through manufacturing.
These are the top-10 sectors, which have been the growth engines of the country for years.
1-Electronics and electronic components
Electronics and electronic components, such as mobile, PCB (Printed Circuit Board), camera module, component ecosystem etc. This sector is working and progressing rapidly for India. In the budget, it is being said that the out-lay for electronics component manufacturing will be increased to Rs 40 thousand crore. Which is much more than the earlier Rs 22,919 crore. This indicates increasing domestic value-addition and reducing import-dependence.
2-Textile Industry
Textile and apparel i.e. cotton, man made fiber (MMF), garments, textile parks, clusters etc. have also played an important role over the years. Textile is a traditional big manufacturing sector of India. It contributes to both employment and exports. In the budget coverage, the Government of India has mentioned directions like making textile an export-hub, mega, cluster approach and skilling.
3-Pharmaceuticals-Biopharma
India already has a global identity in pharma manufacturing. In this budget, the government has mentioned to invest Rs 10 thousand crore in the next five years for biopharma power. The central government has also resolved to upgrade the National Institute of Pharmaceutical Education and Research (NIPER) institutes. This signals a shift towards high-value biopharma manufacturing, which is a very good sign for the country.
4-Automobiles and auto-components
The automobile industry, including cars, two-wheelers and auto-components, is one of the largest organized manufacturing ecosystems in India. The infrastructure push and manufacturing-cluster approach in the budget indirectly supports this sector. This helps the industries in creating logistics, demand and supply chain and its direct benefits are seen in the country and its businessmen and industrialists.
5-Steel/Metals and Fabrication
Steel, aluminium, copper based industries stand as the backbone of the country. We all know that heavy industry, construction, machinery, railways, infra, everything is based on metal manufacturing. The benefits of the capex-driven budget reach the sector as demand for steel and fabricated products increases as government and private construction increases.
6-Chemicals and Petrochemicals
Denying the role of specialty chemicals, intermediates, polymers etc. would be considered ignoring one of the wheels of the country’s progress. This industry has an important contribution in the development of the country. The funds required for three chemical parks are mentioned in the Union Budget 2026. It promotes cluster-based manufacturing.
7-Semiconductor and chip ecosystem
The budget presented on February 1 shows a focus on design, material, tooling, supply-chain etc. towards supporting ISM 2.0 and chip-ecosystem. In the budget reports, the government has made a provision of Rs 1,000 crore for this sector. This area will become the backbone of high-tech manufacturing—electronics, auto, defense, telecom all depend on it.
Semiconductor
8-Capital and engineering goods
Machine tools, industrial equipment, tool rooms etc. are the meta-sector capital goods of the country’s manufacturing capacity. Because he makes machines for other factories. Announcements like 2 high-tech tool rooms in the budget coverage point towards increasing the capacity of high-precision components and tooling.
9-Logistics and Container Manufacturing
Containers are a strategic asset in global trade. In the budget coverage, the government has said that it will invest Rs 10,000 crore in the next five years for container manufacturing. This is likely to boost port-based manufacturing, export and supply chain.
10-MSME Clusters and Foundational Manufacturing
A large part of India’s manufacturing depends on MSME. Be it auto-components, engineering parts, textile job-work or food processing units. The role of MSME is important in everything. In this budget, the government is ready to invest Rs 10 thousand crore to revive two hundred clusters for MSME growth. This step of the government will strengthen the supply chain. Small units, supplier networks, legacy clusters are the backbone of MSMEs.
Strength of manufacturing sectors in export figures
Let us now take a look at some figures of the top 10 manufacturing sectors, which may not be absolutely accurate but are enough to show the importance of the sectors. According to the Ministry of Commerce and Industry, in the financial year 2022-23, the country exported a total of $ 770.18 billion, out of which $ 447.46 billion was related to the manufacturing industry only. The remaining amount came to the country in the form of services.
- About 105115 billion dollars were exported in the form of engineering goods in the year 202223.
- The estimated export of petroleum products was about 8595 billion dollars.
- The estimated export of Gems & Jewelery was approximately 3540 billion dollars.
- The estimated export of different chemicals was around 2530 billion dollars.
- Pharmaceuticals and drugs industries exported an estimated amount of 2428 billion dollars this year.
- The export of electronic goods was about 1822 billion dollars in the year 202223.
- Textiles industry contributed exports of 1822 billion dollars in the year 2022-23.
- Plastics and Linoleum/Polymers was in the top-10 commodity groups in June 2022. Its estimated export was 810 billion dollars.
- Automobiles sector including vehicles, two-wheelers, three-wheelers, cars etc. exported around 15-20 billion dollars. There is no details of parts in this.
What can change due to budget decisions?
The government’s emphasis is on value-addition. Increasing component outlay in electronics is a sign of moving beyond assembly. Announcements like chemical park, textile park/cluster, tool-room help in reducing production cost and compliance, sharing of infra. Strategic investment in sectors like biopharma, semiconductor, rare earth can take India higher in the global supply chain.
Overall, Budget 2026-27 has tried to advance manufacturing in the frame of scale + technology + cluster + supply-chain. The focus on large employment, export capable sectors like electronics, textile and biopharma as well as enabling sectors like semiconductor, rare earth, chemical park and tooling, capital goods shows that the government wants to strengthen the domestic ecosystem along with increasing production.
Also read: Will the rare earth corridor being built in India prove to be a setback for China? Announcement made in the budget