New Delhi, Jan 20 (PTI) The Ficci Manufacturing Index reached an all-time high in the third quarter, with 91 per cent of firms reporting steady or higher production, up from 87 per cent in the previous
quarter, despite production costs remaining on the higher side.
The Ficci's 68th edition of Quarterly Survey on Manufacturing (QSM) assessed the performance and sentiments of manufacturers for eight major sectors in the third quarter.
These include auto components, capital goods, chemicals, fertilisers and pharmaceuticals, electronics and electricals, machine tools, metal and metal products, textiles, apparel and technical textiles and miscellaneous.
Responses have been drawn from manufacturing units from both large and SME segments with a combined annual turnover of over Rs 3 lakh crore.
Nearly 57 per cent of the respondents reported an increase in the cost of production as a percentage of sales, which is consistent with the previous quarter's findings, indicating that costs are still on the higher side.
The increase in the production cost compared to last year is mainly due to higher raw material costs, currency depreciation, and increased logistics, power, and utility costs, the industry body said.
The challenges faced by respondents in expanding capacities include global and geopolitical factors (tariffs, trade restrictions, economic uncertainty), operational issues (labour availability, raw material shortages, regulatory challenges).
The manufacturing index performance in Q3 (October-December) reflects sustained growth and increasing optimism for India's manufacturing sector.
This optimism is also evident in domestic demand, as 86 per cent of respondents anticipated higher or the same orders in Q3 FY 2026 compared to the previous quarter and more so after the latest GST rate cuts announced.
According to the survey, the existing average capacity utilisation in manufacturing is close to 75 per cent, reflecting sustained economic activity in the sector.
The future investment outlook is steady for investments and expansions over the next six months.
Over 70 per cent of the respondents reported higher or the same level of exports in Q3 compared to 69 per cent in the previous quarter.
The average interest rate paid by the manufacturers has been reported to be 8.9 per cent. A little over 87 per cent of respondents reported sufficient availability of funds from banks for working capital or long-term capital, revealed the survey. PTI RSN BAL
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