Indian manufacturing industry is at an important juncture today. The last ten years have seen an impressive annual growth rate of 6.8% marking a phase of strong performance. This compares favourably with growth rates in many other rapidly developing economies. This same period saw the Indian economy grow at around 7%. There is widespread consensus within the Indian political leadership that for India to improve its per capita income and reduce the level of poverty, Indian economy should continue to grow at a high single digit rate if not low double digit.
With a strong growth rate, the manufacturing industry has been a significant contributor to GDP growth. However, unlike many other developing nations the overall contribution to GDP is only 15%, which is the lowest among the major RDEs. It is in this context that some pertinent questions need to be answered. What should be the growth aspirations of the manufacturing sector in the country? How can India enhance competitiveness of its manufacturing sector? What are the impediments to achieving this aspiration?
This report examine these questions in the context of the major forces that are shaping global and Indian manufacturing industries. The report sets out an aspiration for the Indian manufacturing industry for 2025, a stretch but achievable target. It then examines the various constraints which could potentially hold back the Indian manufacturing sector and also the different levers which are critical to achieve the aspirational growth for the sector.