Delhi has emerged as a standout performer in India’s manufacturing landscape, with its industrial sector expanding nearly three times faster than the national average during the fiscal year 2024-25. According to the Index of Industrial Production (IIP) report released by the Directorate of Economics and Statistics, Delhi’s manufacturing sector recorded a growth rate of 11.9%, compared to the all-India growth of 4.1%.

This robust performance highlights Delhi’s industrial resilience and its ability to recover faster from economic challenges compared to other parts of the country.

Manufacturing Surge in Delhi

The report underlined that overall industrial output in Delhi rose 9.19% in 2024-25, significantly outpacing the national industrial growth of 4%. The findings are based on data collected from 134 manufacturing units and one electricity unit in the city.

Key drivers of Delhi’s impressive manufacturing growth included:

• Food products, reflecting both strong domestic demand and processing capacity.

• Leather products, showcasing export potential.

• Motor vehicles and transport equipment, indicating rising consumer demand and infrastructure needs.

• Fabricated metals and chemicals, crucial for multiple downstream industries.

• Beverages, supported by expanding urban consumption.

This broad-based performance underscores the fact that Delhi’s manufacturing ecosystem is diversified, with contributions from both traditional industries and modern sectors.

Electricity Sector Performance

While the manufacturing sector surged ahead, Delhi’s electricity sector registered 3.35% growth in 2024-25 compared to the previous year. This figure was slightly below the all-India electricity growth of 5.2%, suggesting that energy generation and consumption in the city expanded at a slower pace relative to national trends.

Despite this, the electricity sector continues to play a crucial role in supporting Delhi’s industrial and household needs, ensuring that the momentum in manufacturing and allied sectors is sustained.

IIP Methodology and Insights

The Index of Industrial Production (IIP) measures changes in industrial output volume over time. For Delhi, the calculation is based on the gross value added (GVA) from the base year 2011-12, with weights assigned across different sectors.

The latest data showed that while several product groups such as apparel, electronics, machinery, and pharmaceuticals reported lower output, largely due to closures or relocation of units, Delhi’s overall manufacturing growth far outpaced national averages.

Why Delhi Outperformed the National Average

Several factors contributed to Delhi’s industrial growth outpacing India’s:

1. Strategic location and connectivity – Delhi serves as a hub for both domestic and export markets, benefiting from strong logistics and trade infrastructure.

2. Urban consumption trends – Rising population density and consumer demand in Delhi have driven industries such as food, beverages, and transport equipment.

3. Diversified industrial base – Unlike states dependent on a few sectors, Delhi’s growth was distributed across multiple industries, reducing vulnerabilities.

4. Policy and regulatory environment – Business-friendly reforms and easier compliance norms have supported industrial activities in the city.

Balancing Strengths and Weaknesses

While Delhi’s growth is impressive, the report also highlights areas of concern. The relocation of certain industries to neighbouring states due to land and cost constraints has impacted categories like apparel, electronics, and machinery. Additionally, lower electricity growth could pose challenges in supporting long-term industrial expansion if not addressed through infrastructure upgrades.

However, the strong performance in core manufacturing sectors suggests that Delhi continues to be a resilient and competitive industrial hub, even in the face of structural constraints.

National vs. Delhi Industrial Growth Snapshot

The table clearly demonstrates that while Delhi’s manufacturing and overall industrial growth have outpaced the national trend, the electricity sector remains an area where Delhi trails the national average.

Conclusion

The IIP report highlights that Delhi is not only recovering faster than the national economy but is also establishing itself as a leading centre of industrial growth. With manufacturing growth nearly three times the national average, the capital has set an example of resilience and adaptability in industrial policy and practice.

Going forward, addressing infrastructure bottlenecks, especially in electricity supply, and ensuring continued support for diversified industries will be key to sustaining this momentum.

Delhi’s success reinforces the idea that urban-industrial hubs can drive national growth, making the city a pivotal contributor to India’s industrial transformation in the coming decade.

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