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India Inc foresees faster sectoral growth; export demand expected to drive future growth: FICCI-PwC Report

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Inc. is optimistic on the prospects for the growth of the 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 Barometer 2019:

The Barometer was released here today by Mr Puneet Dalmia, Chairman, Committee and MD, along with Dr Rajat Kathuria, Director & Executive, ICRIER; Mr Satendra Singh, Head of Strategy & Development, Supply Network & Engg, Global Operations, Pvt Ltd; and Mr. Rene Van Berkel,

Mr Puneet Dalmia, Chairman, and MD, Dalmia Bharat Group, said "As Global trade has changed significantly in the last few years with new trade routes based on Global (GVCs), we need to provide Indian exporters the opportunity to contribute to align with these global There are number of sectors where can be truly global leader. India can globally lead in exports in number of sectors like textiles, automotive, chemicals, leather, metals and many more such areas".

The FICCI-PwC India Manufacturing Barometer survey was carried out from July to October 2018. The profiles of the personnel surveyed included executive officers, financial officers, chief operating officers and heads of strategy from the Indian The survey respondents represent a mix of companies engaged in exports with varied technology and human capital requirements. Large as well as medium-scale organisations were included in order to gain a balanced viewpoint on manufacturing and the export competitiveness of India's

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, and textiles.

Most of the respondents were upbeat and confident about India's positive growth performance. Most also believed that India has the potential to grow at an average rate of 7% or more in the next 12 months. This is aligned with the projections of international development agencies such as the and the IMF.

Fifty-eight per cent of the respondents believe that their sector would grow faster by at least 5% in the coming 12 months.

The respondents contend one of the key reasons for faster growth is the focus on Ease of Doing and introduction of reforms such as GST that are opening new vistas for investments across the country.

In the past, the relied on the domestic market as the primary source of revenue.

The survey reveals the growing importance of exports to manufacturing companies in the future, with a focus on a good mix of parts - component trade along with end product trade, and the imperative to strategies for both types. Further, India Inc. seems to have begun placing greater emphasis on technology integration, including a renewed focus on R&D and innovation. To cement India's status as a global export destination, India Inc. expects the Government to focus on ecosystem reforms and the industry's integration with global

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%.

Non-availability of and raw materials and cost and quality advantages in sourcing from other markets were seen as the key reasons for rising imports. But what is encouraging is that most of them believe that over the next 5 years, their dependence on imports will reduce.

The survey notes that to make export growth more sustainable, the industry requires an ecosystem that promotes 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.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, January 10 2019. 08:36 IST
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