This paper aims to reveal the significant role of the manufacturing sector in employment generation in India and to analyze the association between the performance of the industrial manufacturing sector and the economic development of India in terms of GDP. This paper is prepared based on analytical and descriptive research methods as it deals with both qualitative and quantitative data. The secondary data relating to the manufacturing sector was collected and converted into figures for easy understanding and analysis. Data was mainly sourced from the Central Statistical Office and the National Sample Survey Organisation. Historically, manufacturing has been essential to the economic growth of developing nations. There have been recent claims that manufacturing has been less significant during the past 20 to 25 years, which has led to developing nations’ early deindustrialization or non-industrialization. However, the increasing rate of input subsidies, the loosening of licensing regulations, and the relative ease of obtaining loans at reduced interest rates have led to MSMEs becoming overcrowded and, as a result, an increase in business failures. Based on the data, the industrial manufacturing sector plays a pivotal role in enhancing GDP.