India needs to improve manufacturing competitiveness. Describing the fall in exports over the past couple of years as ‘disturbing’, Vice-President Hamid Ansari said, “Increasing exports will require much higher price competitiveness than ever before, especially if global growth remains muted.”
In addition, Ansari mentioned that the country also needs to increase technology input in manufacturing. Due to lack of relative technology, India’s share of medium and hi-tech activities in manufacturing exports was way behindChina.
The situation in the area of productivity and efficiency was the same. “During 2010-12, while total factory productivity contributed 11 per cent to the GDP growth in India, its share in China’s growth was 26 per cent,” the Vice-President added.
Speaking at the 184{+t}{+h} AGM of Calcutta Chamber of Commerce, Ansari said, “From the world’s cheapest indigenous cars to the Mangalyaan, India has proved its mettle time and again. Still, India’s share in global exports is a mere 1.7 per cent and manufacturing output as a percentage of GDP is around 13 per cent lower than its Asian competitors.”
He said that emphasis on the domestic manufacturing sector, especially for SMEs – which account for 40 per cent of country’s manufacturing – would be critical to India’s exportgrowth.
He also suggested leveraging the country’s strength in services for export of manufactured items. “Indian merchants have to adapt and innovate to remain competitive and use new technologies, including better utilising the e-commerce platform to increase their sales abroad.”