FICCI Survey Signals Stable Manufacturing Activity Despite Global Trade Risks

The Federation of Indian Chambers of Commerce and Industry (FICCI) has reported an improvement in manufacturing sentiment for the third quarter of FY26. 

Survey findings indicate consistent production activity, stable order flows and a measured outlook for capacity expansion, as per The Economic Times report.

While demand conditions remain supportive, manufacturers continue to flag external risks and operational constraints affecting future planning.

Manufacturing Activity Shows Continued Momentum

FICCI’s Manufacturing Index recorded higher readings in Q3 FY26, with a large share of surveyed companies reporting stable or improved production levels compared with the previous quarter. 

Respondents also indicated steady domestic order conditions, partly reflecting recent policy measures influencing consumption trends.

Capacity utilisation across the sector remains close to three-quarters, suggesting operating levels are stable while leaving limited room for immediate output expansion without additional investment.

Investment and Expansion Outlook

Survey participants expressed a measured outlook for new investments and facility expansions over the coming six months. 

However, several firms highlighted challenges in scaling capacity. These include geopolitical uncertainty, evolving trade policies, supply chain disruptions and domestic regulatory processes.

Operational concerns such as labour availability and raw material access were also noted as factors influencing near-term expansion decisions.

Export Expectations Remain Stable

Export sentiment showed consistency, with many respondents indicating stable or improved overseas orders compared with similar periods last year. 

This suggests external demand continues to provide support, although global economic conditions remain a key variable for manufacturers tracking international markets.

Sectoral Growth Trends

The survey outlined moderate growth expectations across most manufacturing segments. Electronics and electrical equipment indicated comparatively stronger momentum, while capital goods, auto components, metals, textiles and chemicals reflected steady growth expectations within a moderate range.

Employment and Financing Conditions

Hiring intentions showed a gradual increase, with a proportion of manufacturers planning workforce additions in the next quarter. 

Financing conditions were reported as stable, with most firms indicating adequate access to banking facilities for working capital and long-term funding. Average borrowing costs remained within a manageable range for industrial operations.

Read More: India Imposes 30% Tariff on US Pulse Imports Amid Ongoing Trade Deal Negotiations.

Conclusion

FICCI’s Q3 FY26 survey reflects sustained manufacturing activity supported by domestic demand and stable financial conditions. At the same time, firms remain watchful of external risks and operational constraints. The overall outlook suggests continuity in sector performance, with investment and hiring decisions likely to proceed cautiously in the near term.

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