Federation of Indian Chambers of Commerce & Industry or FICCI’s latest manufacturing survey continues to reflect sustained growth and increasing optimism for India's manufacturing sector. For the third quarter of 2025-26, the index has touched all-time high with 91% of respondents reported either higher or same production levels as compared to 87% for Q2 FY 2025-26. This optimism is also evident in domestic demand, as 86% of respondents anticipated higher or same orders in Q3 FY 2026 compared to the previous quarter and more so after the latest GST rate cuts announced.
The existing average capacity utilization in manufacturing is close to 75%, which reflects sustained economic activity in the sector. The future investment outlook is steady for investments and expansions in the next six months. In Q2 2025-26, around 90% of the respondents reported higher or same level of inventory and for Q-3 2025-26, around 83% of the respondents are expecting higher or same level of inventory.
In exports, about 69% of respondents reported higher or same level of exports in Q2 FY 2025-26 and in Q3 2025-26 more than 70% of the respondents expect their exports to be higher or same as compared to previous year’s similar quarters. Production costs for manufacturers in this quarter seem to remain on higher side. Nearly 57% of 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.