Archive · 5 Sep 2026
KPMG Says Productivity Could Drive India’s Manufacturing Future
KPMG says Indian factories could make much more if workers and workplaces become more productive.
A 30% improvement in workforce productivity could produce nearly 35% of India’s future manufacturing output.
Productivity means getting more useful work and products from the same resources.
KPMG says productivity gains can last longer than growth based only on selling more or building larger factories.
The study looked at more than 130 large Indian manufacturing companies over 10 years.
Companies with stronger productivity growth earned profits and increased in value faster than average companies.
Many large manufacturers may need major changes to reach the country’s goals.
KPMG says digital tools, artificial intelligence, better organisation and changes in workplace culture could help.
A sustained 30% improvement in workforce productivity could generate nearly 35% of India’s future manufacturing output, KPMG said.
KPMG found that highly productive companies achieved annual net profit growth of about 10–11%, compared with roughly 7% for average-performing companies.
Productivity-leading companies recorded market-capitalisation growth of around 19% annually, versus nearly 10% for average-productivity firms.
More than 70% of large Indian manufacturing companies may need transformative measures to reach the productivity growth required for national manufacturing ambitions.
Small and unorganised factories produce less than 20% of the output per worker achieved by large firms, with major productivity differences across companies.
- Who
- KPMG and more than 130 large Indian manufacturing companies examined in its analysis.
- What
- A KPMG report said workforce productivity is the strongest long-term growth lever for India’s manufacturing sector.
- When
- The report was published on September 5, 2026; its company analysis covered 10 years.
- Where
- India’s manufacturing sector.
- Why
- Because sustained productivity improvements can increase output, profit margins and competitiveness over time.
- Projected output impact
- A sustained 30% workforce-productivity improvement could drive nearly 35% of India’s future manufacturing output.
- Companies studied
- More than 130 large Indian manufacturing companies.
- Analysis period
- 10 years.
- Profit growth
- Productivity-leading companies recorded about 10–11% annual net profit growth, compared with about 7% for average-productivity companies.
- Market-capitalisation growth
- Productivity-leading companies recorded around 19% annual growth, compared with nearly 10% for average-productivity organisations.
- Transformation need
- More than 70% of large manufacturing companies may require transformative measures to reach the needed productivity growth rate.
- Factory productivity gap
- Small and unorganised facilities produce less than 20% of the output per worker achieved by large firms.