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India’s latest factory data dropped a truth bomb.
Even after a decade of “Make in India”, production-linked incentives, semiconductor dreams and global supply chain shifts, most factory jobs are still coming from the same old places: food processing, textiles and apparel.
According to the Annual Survey of Industries 2022–23, India’s organised manufacturing sector employs about 1.85 crore people. That is the formal factory universe, the part that is registered and counted. Now here is where it gets interesting.
Food products alone account for roughly 11.4% of factory employment. Textiles employ about 9.3% . Basic metals add another 7.6% . Wearing apparel contributes about 7.1% . Motor vehicles come in at around 6.8%.
Machinery, chemicals and non metallic mineral products hover around 6% each.
Nearly 4 out of 10 factory workers are clustered in industries that are relatively labour intensive and traditionally low to moderate on automation. That is not a judgment. It is just math.
Now pause and think about the narrative we hear all the time. India wants to be the next China. India is attracting Apple suppliers. India is building semiconductor fabs. India is talking about green hydrogen, defence manufacturing and electronics exports. All of that is happening. But when it comes to sheer job absorption inside factories, food and fabrics still dominate.
This matters because India is not short of people who need jobs. The Economic Survey 2023–24 estimated that the country needs to create about 78.5 lakh non farm jobs every year till 2030. That is almost 8 million jobs annually, just to keep up. Manufacturing is supposed to play a big role in that transition away from agriculture.
But here is the catch. Manufacturing as a whole accounts for only around 12% of India’s total employment, based on globally comparable data. So even if factories expand, they are starting from a relatively small base in terms of workforce share.
And within that small base, the composition tells a story. Food processing employs the most people because India is still fundamentally an agrarian economy feeding into processing chains. Textile and apparel jobs remain high because they absorb semi skilled labour at scale. Basic metals employ a large workforce due to heavy industries like steel. But these sectors do not always represent the high tech, high productivity dream that policymakers talk about.
To be fair, output growth is happening elsewhere too. ASI data shows that sectors like basic metals, petroleum refining, food, chemicals and motor vehicles together contribute a very large share of total manufacturing output.
In other words, the sectors driving value addition and GDP are not always the ones creating the most jobs per rupee invested. Capital intensive industries can generate huge output with relatively fewer workers.
Moreover, scale-wise, larger factories employ a disproportionate share of workers in organised manufacturing. They tend to pay better wages and are more productive. But India’s industrial ecosystem is still heavily dependent on MSMEs.
Smaller firms often lack the capital to automate or scale aggressively. So they stay labour heavy, which supports employment but can limit productivity growth.
Then there is the policy layer. The Production Linked Incentive schemes have targeted electronics, pharma, auto components, solar modules and more. These are strategic sectors. They aim to boost exports, reduce imports and build global competitiveness. But many of these industries are more capital intensive over time. A semiconductor plant, for instance, may involve thousands of crores in investment but does not directly employ millions of workers.
So what we are seeing is structural tension. India wants high tech manufacturing that raises productivity and global standing. At the same time, India needs mass employment. Right now, the employment engine is still powered by food, textiles and apparel. Not chips and electric vehicle batteries.
None of this means India is stuck. In fact, organised manufacturing employment has grown in recent years and output has expanded. But the data is a reminder that industrial transformation is slow and layered. You can push high tech sectors at the top, but the bulk of workers will still be in traditional industries for a while.
If you zoom out, the question becomes sharper. Can India move more workers into higher productivity manufacturing without shrinking the job base? Can it scale electronics, defence, renewables and advanced machinery in a way that absorbs lakhs of workers, not just crores of capital? And can it upgrade labour intensive sectors with better technology and higher wages instead of replacing them?
The real industrial challenge is not just building more factories. It is changing what kind of factories employ the most Indians. Until that shift happens at scale, 4 in 10 factory jobs will continue to sit in labour heavy industries, and the dream of mass industrial transformation will remain work in progress.
