New manufacturing sectors in eastern India
The phenomenal growth in the Jharkhand and the Chhattisgarh has seen the share
of manufacturing in their GDP rise dramatically as they have attracted industrial
projects
Demand Curve
Source: District GDP of India
India’s manufacturing sector has been coming off its
high growth path since the first quarter of 2007. This graph shows the share of various states in
India’s manufacturing output and their income from
Large parts of India remain outside the impact of this
downturn, as their economies are largely related to the manufacturing activity in 2007-08
agricultural or tertiary sectors. In fact, 10 states with
the highest manufacturing sector GDP account for
70% of the manufacturing output in the country.
Maharashtra, Gujarat and Tamil Nadu are India’s top
three industrialised states, and while the top eight
positions have remained static since 2001, two new
states, Jharkhand and Chhattisgarh have moved up
into the top 10, displacing Rajasthan and Punjab,
respectively.
The phenomenal growth in these two states, since
their inception, has seen the share of manufacturing
in their GDP rise dramatically as they have attracted
industrial projects. Looking at the share of income
that originates in the manufacturing sector, these two
states have shown higher levels than Maharashtra,
Haryana and Tamil Nadu.

The phenomenal growth in the Jharkhand and the Chhattisgarh has seen the share
of manufacturing in their GDP rise dramatically as they have attracted industrial
projects
It is no accident that Chhattisgarh and Jharkhand have had high manufacturing growth. Being
newer and smaller states, they responded more rapidly than their larger—and in some cases
better endowed—neighbours. The result is for all to see. As Orissa, eastern Madhya Pradesh,
Bihar and West Bengal get their act together, large-scale manufacturing based on primary
inputs will rapidly enhance incomes and lifestyles in eastern India.
Currently, there are few large urban markets in eastern India. After Kolkata, there is Patna, a
distant second, and then, Bhubaneswar, an even more distant third. Asansol, Dhanbad, Ranchi
and Raipur continue to be small markets.
But this is changing. The emerging trends can already be seen. For instance, many of the cities
in eastern India have not gone through the realty downturn that has characterized much of
urban India.
With the slowdown, which districts would be affected the most? Some are the standard
manufacturing heavyweights in the country—Surat, Bangalore, Pune, Ahmedabad, Mumbai,
Chennai, Coimbatore, etc. The manufacturing growth centres of the 1990s and 2000s were
predominantly in the west and south and had an international focus.
But the new growth centres are different. Two districts, that have become part of the top 10
manufacturing districts in recent years are Gurgaon, which has attracted large investments in
auto manufacturing, and Raipur in Chhattisgarh, which has two industrial growth centres at Urla
and Siltara.
Demand Curve is a weekly column by research firm Indicus Analytics Pvt. Ltd on consumer
trends and markets.