A small group of large factories generated a disproportionately large share of India’s registered manufacturing output in FY25, highlighting the concentration of industrial production among bigger establishments. According to the Annual Survey of Industries (ASI) 2024-25, factories with annual gross output of ₹500 crore or more represented just 3.57% of operating factories but contributed 62.07% of the sector’s total output.
The findings, published by the Ministry of Statistics and Programme Implementation (MoSPI), also show that these large factories accounted for 62.86% of fixed capital and 60.96% of net value added. In contrast, smaller factories made up a substantial share of operating establishments but contributed relatively little to total industrial production. The data highlights the difference in scale, capital intensity and productivity across India’s registered manufacturing sector.
Just 3.57% of Factories Generate 62% of Manufacturing Output
The ASI 2024-25 findings show that factories with annual gross output of ₹500 crore or more accounted for 3.57% of all operating factories during FY25.
Despite their small share of establishments, these factories generated 62.07% of total gross output.
Their contribution extended beyond production. The group also accounted for:
- 62.86% of the sector’s total fixed capital.
- 60.96% of total net value added.
- 30.72% of all persons engaged.
- 44.47% of total workforce emoluments.
The figures demonstrate how India’s manufacturing output is concentrated among a relatively small number of large industrial establishments.
| Indicator | Factories with annual output of ₹500 crore or more |
|---|---|
| Share of operating factories | 3.57% |
| Share of gross output | 62.07% |
| Share of fixed capital | 62.86% |
| Share of net value added | 60.96% |
| Share of persons engaged | 30.72% |
| Share of total emoluments | 44.47% |
The difference between their share of output and employment is particularly significant. A group representing less than 4% of operating factories generated more than 62% of production while employing approximately 31% of the surveyed workforce.
This reflects the scale and capital-intensive nature of large manufacturing operations.
Smaller Factories Account for More Units but Less Output
The survey also highlights the other end of India’s manufacturing structure.
Factories with annual gross output of up to ₹1 crore represented 18.34% of operating establishments. However, they contributed just 0.08% of total gross output.
These smaller factories accounted for approximately 2.17% of persons engaged in the registered manufacturing sector.
The contrast illustrates the wide difference in production capacity between small establishments and large industrial facilities.
It also shows why the number of factories alone cannot provide a complete picture of manufacturing strength. A country may have a large number of operating establishments while a significant proportion of its industrial production remains concentrated among a relatively small group.
However, low output does not necessarily mean that smaller factories are economically irrelevant. They can support local employment, specialised manufacturing, component production and supply chains serving larger companies.
Large Factories Control a Major Share of Industrial Capital
The concentration becomes even clearer when factories are classified according to the value of their plant and machinery.
Factories with plant and machinery worth ₹10 crore or more represented 15.84% of operating establishments in FY25.
Despite their relatively small share, they accounted for:
- 87.42% of total fixed capital.
- 59.66% of total persons engaged.
- 76.82% of gross output.
- 78.07% of net value added.
At the other end, factories with plant and machinery worth up to ₹5 crore represented approximately 78.69% of operating establishments.
However, this group accounted for only 10.55% of fixed capital and 19.24% of gross output, while employing 34.32% of the workforce.
| Factory category by plant and machinery investment | Share of operating factories | Share of fixed capital | Share of gross output |
|---|---|---|---|
| Up to ₹5 crore | 78.69% | 10.55% | 19.24% |
| ₹10 crore and above | 15.84% | 87.42% | 76.82% |
These figures reveal a structural difference between smaller and larger manufacturers.
Smaller establishments account for most of the factory count and a meaningful share of employment, while larger businesses control most of the industrial capital and production capacity.
The distinction between investment size and annual output is important. The two classifications measure different things: one measures the value of installed plant and machinery, while the other measures the value of production during the financial year.
India’s Manufacturing Sector Records Growth in FY25
Despite the concentration of production, the broader registered manufacturing sector recorded growth across several important indicators during FY25.
According to the ASI results, the total number of factories increased to 2,66,931 from 2,60,061 in FY24, representing growth of 2.64%.
Of these, 2,18,543 factories were in operation during the year.
The sector also recorded increases in output, gross value added, employment and capital investment.
| Manufacturing indicator | FY25 | Year-on-year growth |
|---|---|---|
| Total factories | 2,66,931 | 2.64% |
| Factories in operation | 2,18,543 | — |
| Gross output | ₹165.24 lakh crore | 7.81% |
| Gross value added | ₹26.94 lakh crore | 9.59% |
| Fixed capital | ₹51.12 lakh crore | 10.54% |
| Invested capital | ₹75.56 lakh crore | 11.10% |
| Total persons engaged | 2.10 crore | 7.19% |
| Total emoluments | ₹8.03 lakh crore | 12.08% |
| Net profit | ₹11.56 lakh crore | 7.73% |
Gross value added (GVA) increased from ₹24.58 lakh crore in FY24 to ₹26.94 lakh crore in FY25.
GVA measures the value created by manufacturing after deducting intermediate consumption from output. It provides a clearer picture of the sector’s contribution to the economy than gross output alone.
Corporate Manufacturing Accounts for More Than 89% of GVA
The survey also examined the performance of the corporate manufacturing segment.
This segment accounted for more than 89% of the total GVA captured by the survey and recorded GVA growth of 9.3% in FY25.
The number of operating factories in the corporate segment increased 3.5%, while the number of persons engaged grew 7.6%.
Across the surveyed factory sector, GVA per person engaged increased 2.25% during the year. Net value added per operating factory also rose 6.59%.
These indicators suggest that manufacturing value creation improved during FY25, although gains were not evenly distributed across establishments.
The difference between the growth in output, GVA and employment also matters. Output measures the total value of goods and services produced, while GVA measures the additional value generated by factories after accounting for intermediate inputs.
Five States Account for More Than 54% of Manufacturing GVA
India’s manufacturing activity is also concentrated geographically.
Maharashtra, Gujarat, Tamil Nadu, Karnataka and Uttar Pradesh together contributed more than 54% of the country’s total manufacturing GVA in FY25.
Maharashtra recorded the largest individual share, followed by Gujarat and Tamil Nadu.
| State | Share of manufacturing GVA in FY25 |
|---|---|
| Maharashtra | 15.92% |
| Gujarat | 14.10% |
| Tamil Nadu | 10.90% |
| Karnataka | 7.31% |
| Uttar Pradesh | 6.64% |
Tamil Nadu had the largest number of factories, with 41,221 establishments, followed by Gujarat with 33,084 and Maharashtra with 27,379.
The concentration of manufacturing activity in these states reflects their industrial infrastructure, investment base, supplier networks and access to logistics and markets.
The five leading states also accounted for more than 56% of total manufacturing employment.
What the Findings Mean for India’s Industrial Growth
The ASI data highlights an important challenge for India’s manufacturing ambitions: expanding the number of factories does not automatically translate into a proportionate increase in industrial output.
Smaller manufacturers account for a large share of establishments and contribute to employment, but many operate with relatively limited machinery, capital and production capacity.
Improving access to finance, technology, skilled workers and modern equipment could help these businesses increase productivity and participate more effectively in larger industrial supply chains.
For large manufacturers, the data demonstrates the importance of capital investment in expanding production capacity and generating value.
The findings are also relevant to India’s efforts to strengthen domestic manufacturing under initiatives such as Make in India and production-linked incentive programmes.
The Bigger Picture
India’s registered manufacturing sector is growing, but its production structure remains highly concentrated. A small share of large factories generates most of the gross output, while smaller establishments account for most of the factory count and a substantial portion of employment.
This creates two different priorities for industrial policy: helping smaller manufacturers improve productivity and scale, while supporting continued investment in large manufacturing facilities.
The challenge is not simply to increase the number of factories. It is to build a manufacturing ecosystem in which smaller suppliers can grow, larger companies can expand production and more businesses can move into higher-value manufacturing activities.
Looking Ahead
The next phase of India’s manufacturing growth will depend on whether smaller factories can improve their access to capital, technology, infrastructure and skilled workers. The ASI findings provide a useful baseline for policymakers evaluating industrial support programmes, manufacturing incentives and measures aimed at improving the competitiveness of small and medium-sized manufacturers.
Over the longer term, reducing the productivity gap between small and large establishments could help distribute manufacturing growth more widely across the economy. Large factories will continue to play an important role in industrial output and investment, but stronger smaller manufacturers could broaden employment opportunities, deepen domestic supply chains and make India’s manufacturing ecosystem more resilient.
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