📊 Is India’s Manufacturing Story Hidden in the Numbers?

Everywhere you look, one “fact” about India seems unshakable: 👉 Manufacturing is stuck at 15–17% of GDP. It’s repeated so often — by economists, ministers, and investors — that it feels like gospel truth. The story sounds bleak: despite subsidies, PLI schemes, and reforms, India “leapfrogged” from farms to IT without building factories like China or Korea. But what if that narrative is hiding behind… a statistical quirk? 🤔 Economists Goldar and Das argue that the way India calculates GDP undercounts manufacturing. Why? Because India uses single deflation — adjusting output and inputs with one inflation measure. That misses the fact that input costs (like crude or energy) rose faster than output prices. Result? Factories looked like they were adding less value — even if they were producing the same or more. When the economists recalculated using double deflation (separately adjusting input and output prices), manufacturing’s share shot up to 32% of GDP by 2019. Suddenly, the story changes: ➡️ Not “stagnation”, but a hidden manufacturing boom. Of course, there are caveats. Much of this jump comes from petroleum refining, and the results depend on which “base year” you pick. Still, the broader point stands: India may be underestimating its factories. 💡 For the stock market, this has a subtle lesson. If manufacturing is stronger than we think, India’s industrial backbone is deeper. That benefits companies in sectors like: Capital goods (ABB India

, Siemens, ) Specialty chemicals & engineering ( , Aarti Industries ) Industrial infrastructure (L&T , Cummins India ) india may not be a “services-only” miracle after all. We might be slowly building the factories that can power jobs, exports, and markets — just hidden in the way we count them. Track PLI-driven manufacturing plays where exports + margins are growing. Focus on companies tied to industrial capex cycles rather than just IT and services.