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Household mfg grows 4x faster than corporates

By Sohail Khan 8 September 2026, 11:52 pm

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Business News›News›Economy›Indicators›Gaining ground: Household manufacturing grows 4x faster than corporates

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Gaining ground: Household manufacturing grows 4x faster than corporates
Synopsis

Household manufacturing in India is growing nearly four times faster than corporate entities. This sector's gross value added shows a substantial compound annual growth rate. Corporate manufacturing's share of total manufacturing GVA has seen a decrease. The expansion is driven by smaller businesses and better informal sector data. Textiles, apparel, and metal products lead household manufacturing growth.

India Inc turns more bullish as business confidence soars to 66 in Q2 FY27: CII — Household production GVA grew 25.2% annually during FY23-25, versus 6.7% for corporates

New Delhi: Household manufacturing is gaining ground in India's industrial economy, with its gross value added (GVA) rising nearly four times faster than that of corporate manufacturers between FY23 and FY25, helped by growth in smaller businesses and improved gathering of informal-sector activity.

Household units accounted for 19.4% of total manufacturing GVA in FY25, up from 14.8% in FY23. The share of corporates fell to 80.6% from 85.2% in the same period.

Strong GVA growth underpins this shift in shares. GVA of household manufacturing units grew at a compound annual growth rate (CAGR) of 25.2% during FY23-25, far outpacing 6.7% for corporate manufacturing, showed an analysis of current price data from the recently released National Accounts Statistics 2026.

ET Bureau

Even at constant prices, value added from household manufacturing grew at a CAGR of 23.4%, higher than the 7.9% for the corporate sector. Overall, manufacturing accounted for around 15% of GVA.

Also Read: New GDP series reflects better data, methods, says MoSPI

The manufacturing sector remains heavily concentrated in micro units, with very few medium-sized firms, a structure linked to lower productivity and weaker job creation, according to a report by BofA Global Research. The trend in household manufacturing could therefore point to continued expansion at the smaller end of the manufacturing base.

Data showed that the operating surplus of household manufacturing units rose 24.5% annually to ₹ 4.6 lakh crore in FY25. For corporate units, it grew 7% to ₹15.3 lakh crore. "The high growth rate of households under manufacturing reflects that it's on a low base compared to corporate, which is on a much larger base," said Gaura Sengupta, chief economist at IDFC First Bank. "The strong growth of the household sector also reflects a large share of self-employment." Better capturing of the informal sector is another factor, she said.

Vivek Kumar, economist at QuantEco Research said this potentially reflects a statistical artefact – the transition from the NSS 73rd round of 2015-16 to the ASUSE benchmark. The increase in household manufacturing activity comes alongside an expansion in the number of unincorporated enterprises. Data from the Annual Survey of Unincorporated Sector Enterprises (ASUSE) showed manufacturing units rising to 21.5 million in 2025 from 20.1 million in 2023-24. Employment in these units rose to 34.9 million from 33.7 million.

Also Read: India needs double-digit factory growth, Bank of America says

"The profitability of the corporate sector has been under pressure, which is getting reflected," said Madan Sabnavis, chief economist at Bank of Baroda.

Textiles, apparel and leather products accounted for the largest share of household manufacturing value added at 20% in FY25, growing at 16.1% CAGR between FY23 and FY25. Metal products accounted for 17.3% and grew 33.6%, while food, beverages and tobacco contributed 16.1%, growing 22.9%.

For corporates, coke, petroleum, rubber, chemicals and related products had the largest share at 31% but grew only 2.9%. Machinery and equipment accounted for 30.5% and grew 16.4%.

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household manufacturing growthcorporate manufacturing declineGVA manufacturing Indiamicro units in manufacturinginformal sector activityemployment in manufacturingCAGR of household unitsBofA Global Research reportNational Accounts Statistics 2026household vs corporate growth

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