As per global management consulting firm McKinsey and Company, India's manufacturing sector could touch US$ 1 trillion by 2025. The burgeoning demand in the country and the multinational corporations' desire to establish low-cost plants in India can contribute to this. There is potential for the sector to account for 25-30 per cent of the country's GDP and create up to 90 million domestic jobs, by 2025.
India's growing economy offers domestic entrepreneurs and international players many opportunities to invest. The country's government, realising the significance of the manufacturing industry to India's industrial development, has taken necessary steps to increase investment in the sector.
India's growth in the manufacturing sector over the last decade has been good. It was ranked the fourth most competitive manufacturing nation in Deloitte's global index for 38 nations, in 2013. Its economy also experienced significant expansion during the period 2006-2011, achieving a five-year compound annual growth rate (CAGR) of 7.8 per cent.
Manufacturing activities in India rose the most in 17 months in July 2014, on increased orders, as per the HSBC Purchasing Managers' Index (PMI). PMI was at 53 points in July from 51.5 in June. With investors gaining more confidence in India's economy, the country's manufacturing sector could grow by up to 14 per cent, according to the government. India witnessed 15 per cent growth in the manufacturing sector in FY07. "Therefore, achieving 14 per cent growth is not impossible," as per Mr Ajay Shankar, National Manufacturing Competitiveness Council's member secretary. The Indian chemical industry is the 12th largest producer in the world and third largest in Asia, in terms of volume production. Electronics goods production in India is expected to touch US$ 104 billion by 2020. The production grew at a CAGR of 14.4 per cent during the period FY07-13. The country's electronics market is anticipated to grow to US$ 400 billion by 2020 and expand at a CAGR of 24.4 per cent during the period 2012-2020.
India's manufacturing sector is vital for its economic progress. Presently, the sector is an attractive hub for foreign investments. Several mobile phone, luxury and automobile brands, among others, have set up or are looking to establish their manufacturing bases in the country. Hi-tech exports are also predicted to enhance India's manufacturing sector; they witnessed a CAGR of 26 per cent during the period 2007-2011, with exports reaching US$ 20.9 billion from US$ 8.1 billion in 2007. Pharmaceuticals and electronic goods dominate exports of hi-tech products, with the share of electronics growing nearly twofold in the period 2007-2011, according to an industry study.
Source-IBEF(Indian Brand Equity Foundation)
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