India Inc. is optimistic on the prospects for the growth of the economy in the next 12 months, foresees faster sectoral growth and expects future growth to be driven by export demand. This prognosis is held out by the FICCI-PwC India Manufacturing Barometer 2019: Building Export Competitiveness.
The FICCI-PwC India Manufacturing Barometer survey was carried out from July to October 2018.
The sample includes companies that contribute approximately 12% to the manufacturing GDP of the Country from various sectors, namely, automobiles and auto components, chemicals, electrical machinery, food processing, leather, pharmaceuticals and textiles.
The respondents contend one of the key reasons for faster growth is the focus on Ease of Doing Business and introduction of reforms such as GST that are opening new vistas for investments across the Country. In the past, the manufacturing sector relied on the domestic market as the primary source of revenue.
To cement India's status as a global export destination, India Inc. expects the Government to focus on business ecosystem reforms and the industry's integration with global value chains.
Currently, over 65% of the companies whose CXOs participated in the survey have the Indian market as their major source of business. However, 85% of them believe that their future growth will be driven by export demand. This is in sync with India's export performance over the last 12 months. In FY 2017-18, India's exports grew by 9.8%, the fastest growth in the last five years.
An interesting observation from the survey is that the quality advantage being seen as the reason for driving export growth, ahead of cost advantage as the primary reason for exports. However, imports during the same period also grew by 19.6%.
The survey notes that to make export growth more sustainable, the industry requires an ecosystem that promotes manufacturing compe-titiveness and facilitates the production of goods of global quality standards at prices that are competitive. Stronger economic relations with certain countries in target sectors will enable the development of competitive supply chains beyond Indian borders.
Source :- Dailyshippingtimes.com