Manufacturing Sector in India -part 3

The manufacturing sector’s contribution to India’s GDP is considered low when compared to other Asian economies (in which manufacturing contributes more like 25 to 34 percent to GDP) and is seen as not fulfilling its potential. To remedy this, the recently released National Manufacturing Policy has set clear objectives to harness the sector for economic growth, including an emphasis on FDI and foreign technologies. FDI in multi brand may be problem for manufacturing sector because domestic retailers source domestically. International retailers operate on the principle of buying internationally at the cheapest cost. Majority items to be sold by international retailers are going to be sourced from cheaper manufacturing economies like China. Clothes, shoes, toiletries and other items of daily use are not likely to bear the Indian signature. The fall in manufacturing sector jobs is likely. India needs to improve manufacturing sector, so as to enable us develop into low cost manufacturing economy. For this, we need to improve infrastructure, low cost utilities, competitive interest rates and trade facilitation. If India improves manufacturing sector, FDI won’t go to other economies to source products.