INDUSTRY
Capex super-cycle to drive manufacturing to $1.5 trillion by 2035: Morgan Stanley
- IBJ Bureau
- Jul 22, 2026
India’s manufacturing sector is likely to see sharp growth in the coming years, supported by industrial policy and reforms, Morgan Stanley has said in a report.
With India seen entering a multi-year capex super-cycle, the manufacturing sector is projected to expand to $1.5 trillion by 2035, which is avout 2.8 times its current size, the report adds.
“Success in expanding manufacturing is imperative to India’s medium-term growth trajectory,” Morgan Stanley economists, led by Upasana Chachra, have said.
The US-based global investment bank expects India’s share of manufacturing in its GDP to rise to around 20 per cent by 2035 from nearly 15 per cent currently, implying an incremental manufacturing base of about $930 billion.
“This is underpinned by our expectation that real manufacturing GDP CAGR will improve to around 9 per cent from the previous five-year CAGR of 6.5 per cent, the report notes.
The boom in the manufacturing sector is seen driven by energy transition investment, defence manufacturing, industrial capacity expansion and infrastructure development, according to the report.
While the government has put in place the Make In India programme a decade ago, the share of manufacturing in the GDP has stayed around 15 per cent.
“The gap between intent and outcome reflects certain known frictions, such as high delivered costs, thin domestic supplier bases and limited plug-in to global value chains,” Morgan Stanley has adedd.
Report By
View Reporter News