India's manufacturing sector has registered a balanced growth across different industries over the last six months with even the old economy companies turning the corner, says a new study released on Sunday.
The CII manufacturing-ASCON survey, carried out by the Associations Council of the Confederation of Indian Industry (CII), states that 65 per cent of the companies in 125 sectors tracked have been registering growth during the last six months.
"The Indian economy is poised to reap the benefits that come with a strong manufacturing base in an economy," said Satish Kaura, chairman of CII Industry Council.
"The relentless emphasis that Indian companies have placed on continuously enhancing design and engineering skills, building new capabilities for product and technology innovation and in leveraging resources from around the world to provide value to customers are contributing in transforming Made in India into a global brand," stated Kaura.
The India advantage is fast changing from that of cost arbitrage to include sustainable factors such as skilled labour, design and research and development capability, a large consuming middle class, besides a growing and liberalising economy, states the survey for April-September 2006.
The manufacturing sector is clearly benefiting from this changing perception.
"In fact, manufacturing in India is now acquiring a whole new dimension. While many low-end jobs are being outsourced to India, the manufacturing sector is also turning into the design and manufacturing hub of the world," says the report.
Be it industrial robot manufacturer Gudel or auto giant BMW or South Korean consumer goods giant LG, India has become a key manufacturing destination for a large number of global players. It is already a preferred destination for the manufacture of auto components, bulk drugs and producer services such as software, finance and several others.
"Reports of the old economy companies turning the corner and registering positive growth after having posted losses for three consecutive years is an encouraging fact," states the survey.
"What is more heartening is the fact that these companies are not from one or two sectors but are spread across sectors, thus indicating a balanced manufacturing sector growth."
The manufacturing sector had recorded a growth of 9.1 per cent in 2005-06, compared to 9.2 per cent in the previous year. This is being strengthened quarter-on-quarter during the current fiscal.
"The manufacturing sector seems set to enhancing its share in the GDP to the targeted 30 per cent," said Sarita Nagpal, head of the manufacturing services division of CII.
The survey states that with the increasing investor confidence in India's manufacturing and design capabilities and growth global recognition there is little doubt that the country will achieve the much-required growth in the manufacturing sector.
During the current fiscal, the manufacturing sector has already received $524 million till July, compared to $1,451 million received during 2005-06.
"Almost every sector is forecasting a growth trend over the next five- to 10-year period with some predicting a 20 per cent growth rate in the next 12 months," the CII report states.