New Delhi, Oct 17 : The Indian manufacturing sector needs to sustain an annual growth rate of over 10 per cent till 2022, in order to capture a five per cent share of the global output, says a report by global consultancy KPMG.
The innovation and entrepreneurial confidence of Indian firms have helped them leap frog in the process of discovery and market leadership, the report said, adding Indian firms need to take bold steps into uncharted waters.
"If we are able to sustain this growth rate (10 per cent annually) till 2022, then we could reach a five per cent share of the global manufacturing output," the report stated.
Indian economy is expected to be the third largest in the world by 2020, KPMG's Manufacturing India @ 75 report said.
"The report envisions India at the forefront of global manufacturing and trade of good, a leader in skill-intensive sectors and a global hub of research and development (R&D) and design," said KPMG India's National Industry Director (Consumer Markets) Ramesh Srinivas.
India' share of global manufacturing has just crawled to 1.8 per cent in the current year from 1 per cent in 1995, the report said.
"Protectionism has been deeply rooted in the Indian society and we have not yet been able to completely change that culture. This is one of the key reasons for low productivity in Indian manufacturing," Srinivas added.
Emphasising the reason behind slow growth rate, report stated this is primarily because the Indian manufacturing has grown on the back of growth in internal demand.
However, in coming years there would be a huge demand for manufactured goods in India, mainly because of a large middle class and this will lead a faster growth rate for the sector, report added.
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