Provided the right policies are implemented over the coming years, it is expected that India can gain a larger share in the global trade.
The growth in India’s manufacturing sector is key for the country’s growth and may provide a gateway to be among middle-income level peers as per capita income grows rapidly through manufacturing sector expansion. “With a per capita GDP of around USD 2,000, a large deficit in job opportunities, and a structural demand problem, India needs to refocus on expanding the manufacturing sectors,” said a report by Kotak Economic Research. However, to boost the sector, the government needs to focus on improving the productivity of factors of production, infrastructure, approval, and trade relationships to gain through labor-intensive, low-to-medium skilled and few high-skilled sectors, added the report.
Provided the right policies are implemented over the coming years, it is expected that India can gain a larger share in the global trade. Going by the estimates, India could potentially gain around USD 100-150 billion over the next decade through sectors such as chemicals, footwear, furniture, and textiles if the focus is shifted towards accelerated export growth.
Talking about today’s driver of growth, RBI Governor Shaktikanta Das has also mentioned that taking India’s manufacturing industry to the global level is of utmost importance. He said, going forward, India should strive and become a part of the global manufacturing value chain. “I am sure that the policymakers in the Government will give due attention to this aspect. There are of course a number of steps which have been taken in this direction in the recent months and years; however, more steps are necessary,” said Shaktikanta Das.
Meanwhile, instability in the policies and less-supportive investment environment have brought discomfort among the traders. Adding to the worse, demand conditions worsened as the slowdown took the economy in its grip. These factors together have made the manufacturing industry vulnerable despite the Narendra Modi-led government’s flagship scheme of ‘Make in India’.