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Business leaders expect faster growth in the next 12 months driven by expanding domestic market, technology and increased spending, according to a report.
The India Manufacturing Barometer 2019 by the Federation of Indian Chamber of Commerce and Industry (FICCI) and PwC reports that close to 74 per cent of companies surveyed believe that the next 12 months will see faster growth in their sector. Around 58 per cent of the respondents believe that their sector would grow faster by at least 5 per cent.
The sample for the survey includes companies that contribute approximately 12 per cent to the manufacturing Gross Domestic Product (GDP) of the country. The sectors include automobiles, chemicals, electrical machinery, food processing, leather, pharmaceuticals and textiles.
India’s economy is projected to grow anywhere between 7.3 – 7.7 per cent. Domestic market remains a major demand driver for India Inc. However business leaders anticipate an increase in turnover from global demand in the future.
Speaking at the launch of the report here on Wednesday, Puneet Dalmia, Managing Director, Dalmia Bharat Group, said that majority of the investment that happen in India are to cater to the domestic market. “Our exports accounted for 1.5 per cent of the total exports in 2013 and 1.7 per cent in 2017,” he said and added that for a country this big our exports should reflect that.
Rajat Kathuria, Director and Chief Executive Officer (CEO), ICRIER, a think tank, agrees. He said, “Our domestic market is big. But to be competitive you need to serve the global market.”
As India expands it manufacturing footprint, Kathuria said the companies should improve their logistics better. Logistics cost in India is about 15 per cent of the overall cost whereas the cost is less than 10 per cent in countries like Japan. “Efficient logistics now will go a long way than it did in the past,” he added.
Other road blocks for exports include restrictions imposed by importing countries such as certifications, testing procedures, customer and technical barriers such as labelling regulations. Some countries impose price control measures that impact the custom value and limiting sales of goods to certain areas.
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