The national manufacturing policy, coupled with setting up of national manufacturing and investment zones will further spur the growth of the Indian manufacturing sector 
India is on a robust growth path as regards its manufacturing activities and is set to become the world’s most preferred manufacturing hub. This has been testified by figures. India’s factory output beat expectations by rising 17.6% in April 2010, very close to a 20-year high. The manufacturing sector, which contributes around 80% of the Index of Industrial Production (IIP), recorded 19.4% growth in April. Manufacturing of capital goods and consumer durables recorded a growth of nearly 73% and 37%, respectively, in April.
The HSBC Markit Purchasing Managers’ Index (PMI), one of the most dependable indicators of manufacturing activity in the country, stood at 57.2 in the month of April. PMI above 50 indicates that manufacturing activities are intensifying. Exports from special economic zones (SEZs) recorded a staggering growth of over 122% to US$49.5 billion in 2009-10 as compared to US$22.4 billion in 2008-09. IT products, petroleum, leather, garments etc form the bulk of exports from SEZs.
Factors facilitating growth
Figures indicate that an increase in demand for Indian goods in both domestic and Western markets have led to this growth. However, demand is not the only driver of manufacturing growth. The Indian government is taking the right steps to support and expand this growth. Recently, the Indian government has announced that it will soon come up with a national manufacturing policy by August, with an aim to create hubs and zones for setting up manufacturing industries. The policy will focus on removing the problems that have in the past plagued SEZ policy.
The government also plans to set up the national manufacturing and investment zones (NMIZs) in order to increase the share of the sector in the country’s GDP. The main objectives of NMIZs are as follows:
· Boost investments in the manufacturing sector and make the country a global manufacturing hub
· Elevate the share of manufacturing segment in the country’s GDP to 25% by 2022
· Double the current employment level in the sector
· Enhance global competitiveness of the sector
Studies and reports indicate that China has been successful in manufacturing activities owing to factors such as preferential government policy, foreign investment, infrastructure investment and human capital. While India too has been successfully implementing the policies followed by China, other factors such as dependable suppliers, low manufacturing costs and large domestic base have also fuelled the growth of the Indian manufacturing sector.
However, it will be a bit premature to start comparing India with China. According to a report released by the United Nations Industrial Development Organisation (UNIDO), China occupied the second rank among the top 10 producers of manufacturing outputs in 2009. India’s rank was 9. However, it is heartening to know that India surpassed Canada, Brazil and Mexico in 2009 to reach the 9th position from the 12th position that it held in 2008.
Currently, India has plenty of skilled workforce, to be outranked only by the US and Singapore. Moreover, India’s skilled workforce is expected to grow over the next 20 years, which will further fuel the growth of the sector.
Nikhil Nanda, managing director and CEO of JHS Svendgaard Laboratories Ltd, a small-sized manufacturer of oral care products in New Delhi
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