India Inc. is upbeat about the future of the economy as they expect growth to be driven by strong domestic demand and an increased focus on export markets, says a new survey of manufacturers by global consulting firm PwC and industry body Federation of Indian Chambers of Commerce and Industry (FICCI).
The study found that 74% of the manufacturers hope for a faster growth rate in their respective sectors over the next year, while more than half expect their sector to grow faster by at least 5% in the next 12 months.
The PwC-FICCI report, ‘Manufacturing Barometer’ also said that in the next year, over 7% growth in the gross domestic product (GDP) looks achievable for the country.
While 66% of the manufacturers said they believed that introduction of the goods and services tax (GST) will help attract foreign and domestic investments across new locations, 80% expect exports to increase in the next five years.
The report suggests that to make export growth more sustainable, the industry requires an ecosystem that promotes manufacturing competitiveness and facilitates the production of goods of global quality standards at competitive prices. Stronger economic relations with focus countries in target sectors will enable the development of competitive supply chains beyond Indian borders, it said.
The report also suggests that with India aspiring to become a $5 trillion economy in the next few years, with manufacturing contributing $1 trillion. The backward integration with global value chains and increased use of technology would be required to increase export competitiveness of India’s manufacturing industry.