This research examines how foreign direct investment (FDI) affects the manufacturing sector's output in India, with a particular emphasis on capital accumulation utilizing neoclassical and classical economic theories. It makes use of time-series analysis spanning from 2000 to 2022 and applies a Vector Error Correction Model (VECM) to assess the effects of labor, domestic capital, and foreign direct investment (FDI) on manufacturing growth both in the short and long terms, with and without the inclusion of labor quality as an exogenous variable. The results show that labor quality and capital inputs interact to enhance the impact of labor, domestic capital, and foreign direct investment (FDI) on industrial production. The creation of investment-friendly laws to encourage FDI inflows, a focus on skill development, and higher-quality labor are among the recommendations made to optimize the advantages of the manufacturing sector and quicken India's economic expansion.