There is a distinct slump in Indian manufacturing. Its GDP growth has slipped from an average of 10 per cent between 2005 and 2011 (compound annual growth rate) to 2.7 per cent in 2011/2012 and a meagre one per cent in 2012/13.
Manufacturing's share in India's overall GDP now stands at 15.1 per cent - the
lowest share in the last decade. This compares unfavourably with China where manufacturing contributes a whopping 30 per cent to its GDP.
However, CEOs of manufacturing houses are
seeing light at the end of the tunnel, India Managing Director of The Boston Consulting Group (BCG) Arindam Bhattacharya, said, at CII's Manufacturing Summit in Mumbai on Friday.
BCG polled more than 70 CEOs and discovered some optimism. Eighty per cent of the respondents of the survey, done in association with CII, expected their company's growth over the next five years to be greater than the last five years. Forty-two per cent said they were more confident about a rebound in India's manufacturing growth in the next two years to pre-2010/2011 averages.
The rebound in manufacturing could be exports-led.
Consumer sentiment in India is still feeble and the rupee's depreciation against the dollar has meant that India has become more competitive as a destination for manufacturing.
Textiles, chemicals and petroleum exports are driving growth. In textiles, particularly, there is resurgence in demand from key developed markets, the BCG report stated.
Over the next five years, most manufacturers are likely to prioritise exports across all sectors. Executives at the CII summit pointed to sectors such as food processing where India hasn't done too well - with a favourable currency, there is now an opportunity.
PHOTO: Associated Press 
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