By: Balasubramanian A, Senior Vice President, TeamLease Services.
Projected Job Creation in the Sector (Next Few Years)
India’s manufacturing sector is witnessing steady expansion, supported by strong domestic demand, PLI-led investments, infrastructure push, and supply-chain diversification strategies such as China+1. Manufacturing drove industrial growth in December 2025 with an 8.1% expansion, its highest in over two years. Growth was led by a surge in electronics (34.9%) and automotive (33.5%) sectors, supported by strong demand for core inputs like cement (13.5%) and steel (6.9%).
Unlike earlier cycles of aggressive headcount addition, workforce expansion is now closely aligned with production commissioning timelines and productivity benchmarks. Over the next few years, the sector is expected to generate 1.5–2 million incremental jobs, with hiring concentrated in industrial corridors such as Hosur, Chennai, Pune, Coimbatore, Sri City, Ahmedabad, and Hyderabad. Seasonal production cycles in automobiles, construction materials, appliances, and export-linked goods further create temporary spikes in frontline manufacturing deployment. Semiconductor projects across Gujarat, Assam and southern clusters are projected to generate ~1 million ecosystem jobs in 2026–28 (fabrication, ATMP, chip design, supply chain). National Manufacturing Mission aligning clean-tech, advanced materials, EV batteries and green hydrogen manufacturing under a unified industrial roadmap.
Also, Union Budget 2026–27 has announced Dedicated Rare Earth Corridors across Odisha, Kerala, Andhra Pradesh, and Tamil Nadu, alongside a ₹7,280 crore REPM Manufacturing Scheme to create 6,000 MTPA integrated capacity. With 482.6 million tonnes of rare-earth resources identified by GSI, this push is expected to generate jobs across mining, mineral processing, and advanced manufacturing, strengthening the clean-tech and electronics value chain.
India’s recently concluded FTAs and improving trade access are strengthening export competitiveness for textile manufacturing. Additionally, the recent U.S. Supreme Court ruling quashing certain tariff measures has eased trade uncertainty, supporting order recovery from key export markets. Together, these developments are expected to accelerate capacity utilisation and drive incremental job creation across textile clusters.
Current Workforce Size in the Industry
Manufacturing has emerged as a key growth engine, with GVA growth accelerating to 7.72% in Q1 and 9.13% in Q2 of FY26, signalling a structural recovery. Government-led initiatives, particularly the Production Linked Incentive (PLI) schemes across 14 sectors, have played a catalytic role, attracting over ₹2.0 lakh crore of actual investment, generating incremental production/sales exceeding ₹18.7 lakh crore, and creating over 12.6 lakh jobs as of September 2025.
Formal manufacturing continues to absorb contract and informal workers into structured payroll-based roles, particularly within large OEMs and tier-1 supplier networks. With organised manufacturing expanding across clusters, the proportion of compliance-driven and digitally monitored roles is steadily increasing.
Key Workforce Gaps and Strategies to Bridge Them
A significant talent gap exists in multi-skilled shopfloor technicians who can combine machine operations with basic digital reporting, quality documentation, and safety compliance. Employers report shortages in CNC-PLC cross-functional skills, robotics familiarity, preventive maintenance capabilities, and ERP/MES system usage.
Manufacturers are increasingly shifting toward skill-based hiring and cross-skilling existing workers rather than expanding headcount aggressively. Commissioning-linked hiring models and structured certification pathways are being deployed to bridge these gaps. The focus has clearly moved toward improving skill density per worker instead of relying purely on workforce volume.
Typical Entry-Level and Mid-Level Salary Ranges
Compensation for blue-collar manufacturing roles has been rising gradually as employers compete for technically reliable and multi-skilled talent. Entry-level shopfloor roles typically offer annual compensation in the range of ₹1.8–₹3.2 lakh, depending on location, shift structure, automation exposure, and productivity-linked incentives.
Mid-level roles such as production engineers, automation specialists, and plant supervisors command higher pay bands, particularly in organised manufacturing setups and PLI-supported segments. Automation-linked and digitally enabled roles often attract a premium compared to traditional production-only functions.
Attrition Rates and Contributing Factors
Attrition in blue-collar manufacturing roles typically goes as high as 10%-15% per month across frontline blue-collar roles, while mid-level technical roles experience relatively lower churn. Key drivers include wage competition across industrial clusters, long commuting distances, contract-to-permanent expectations, and limited career progression for single-skill operators.
Manufacturers are responding with structured career ladders, multi-skill certification programs, attendance-linked incentives, and improved on-site welfare facilities to enhance retention and workforce stability.
Essential Skills and Cost of Upskilling
The modern blue-collar manufacturing worker requires a mix of technical capability, basic digital literacy, and operational discipline. Core skills now include machine handling, quality documentation, safety compliance, preventive maintenance awareness, and cross-functional communication.
For a shopfloor operator earning approximately ₹18,000–₹20,000 per month, with productivity directly linked to output value, a structured training investment of ₹10,000–₹20,000 that improves efficiency by 8–10% can significantly enhance production throughput and reduce rework or downtime. Even a modest improvement in output quality and machine uptime can help recover the training cost within a few months, highlighting the strong ROI of targeted blue-collar upskilling in manufacturing.
Other Key Workforce Trends Shaping the Sector
Policy tailwinds, including PLI schemes, infrastructure expansion, GST stabilisation, and domestic consumption growth, continue to strengthen manufacturing competitiveness. Industrial ecosystem expansion across major corridors is driving cluster-led workforce demand rather than geographically dispersed hiring. As new capacities are commissioned across automobiles, EVs, electronics, renewables, capital goods, and industrial components, hiring demand is rising across blue-collar shopfloor roles, including machine operators, assembly technicians, quality inspectors, maintenance staff, warehouse handlers, and line supervisors. Manufacturing employers are increasingly prioritising multi-skilling, commissioning-paced hiring, automation readiness, and compliance-driven workforce structures. Together, these trends position India’s manufacturing ecosystem for sustained, skill-led blue-collar workforce expansion over the medium term, with productivity and adaptability emerging as the defining workforce differentiators.