Sub-Headline: Large industrial units play a major role in India’s manufacturing economy, highlighting the importance of scale, productivity, investment and employment generation.
Key Highlights
- Large factories represent just 10.4% of total manufacturing units.
- These units contribute 72.4% of manufacturing Gross Value Added (GVA).
- Large factories account for 63% of manufacturing employment.
- Industrial scale supports higher production capacity and operational efficiency.
- Manufacturing growth depends on investment, technology and stronger supply chains.
- Smaller enterprises remain important for entrepreneurship, local employment and industrial supply networks.
Large Factories Power India’s Manufacturing Growth, Generate 72.4% of GVA
New Delhi, November 4: India’s manufacturing sector is witnessing a significant concentration of production and employment among large industrial establishments. Despite accounting for just 10.4% of operational factories, units employing more than 200 workers contribute 72.4% of manufacturing Gross Value Added (GVA) and provide approximately 63% of factory employment.
According to a study published in the National Statistical Office’s Sarvekshana journal, based on the Annual Survey of Industries (ASI) 2022-23, these large factories generated nearly ₹15.9 lakh crore in GVA out of the sector’s total of approximately ₹22 lakh crore. The findings highlight the importance of industrial scale in manufacturing productivity and employment. The Policy Edge +1
Large Factories Lead in Production and Employment
The study reveals a striking difference between large and small manufacturing establishments. Factories employing up to 50 workers account for more than 71% of operational units but contribute only around 10% of manufacturing GVA.
Meanwhile, micro factories employing up to 10 workers represent 36.3% of all units but generate approximately 2% of manufacturing value added.
These figures indicate that larger industrial establishments are better positioned to benefit from economies of scale, advanced machinery, organised production systems and stronger supply-chain integration.
Industrial Scale and Job Creation
Large factories are also major sources of organised manufacturing employment. Their 63% share of factory jobs demonstrates that industrial expansion and employment generation can go together.
However, the data reflects their share of existing employment rather than the number of new jobs created during the survey period.
Larger establishments also tend to offer higher wages and greater labour productivity, as highlighted in the Economic Survey 2025-26. indiabudget.gov.in +1
Small Manufacturers Face Productivity Challenges
While large factories dominate industrial value creation, smaller manufacturing units face challenges involving access to technology, affordable credit, workforce training and production efficiency.
The findings underline the need for policies that help smaller enterprises expand operations and integrate into supply chains serving larger manufacturers.
Improved infrastructure, technology adoption, skill development and easier financing could strengthen the competitiveness of smaller factories.
Manufacturing Growth Requires Both Scale and Inclusion
India’s latest manufacturing indicators also point towards continued industrial expansion. According to the Annual Survey of Industries 2024-25, released in September 2026, registered manufacturing GVA increased by 9.59%, while employment grew by 7.19% compared with the previous survey year. Press Information Bureau
The findings suggest that large-scale manufacturing is central to India’s industrial economy. At the same time, expanding opportunities for smaller manufacturers will be important for ensuring that productivity gains and employment benefits reach a broader section of the economy.
