Manufacturing exports seen at $300 billion

Manufacturing exports from India are likely to grow to $300 billion in 2015 from $48 billion in 2003, according to a CII-McKinsey report. The country would then have a 3.5 per cent share of the world manufacturing trade.

Along with the robust growth in domestic demand, this spurt is expected to create 25-30 million new jobs in manufacturing and add 1 per cent to India's annual GDP growth rate.

To reach the $300 billion target, the industry has to clock a growth of 17 per cent every year as against the 11 per cent rate at which it is growing at present. Manufacturing exports from India grew 20 per cent in 2003 over the previous year.

Of the total $300 billion, $70- $90 billion is expected to come from just four sectors "" apparel, auto component, speciality chemicals and electricals and electronic products. India's exports in these sectors were $10 billion in 2002.

McKinsey warned that this kind of growth would come only when Indian players adopt a global mindset and there is a rapid build up of cost excellence and marketing abilities.

Since most of this growth will come from incremental outsourcing by multinational corporations, McKinsey has advised that the government must work to ensure that MNCs proactively choose India as their top three outsourcing destinations.

"For MNCs, India could become either a dominant sourcing and manufacturing base in its own right (in auto components, custom-based and non-electronic products), or an alternative sourcing hub to China to avoid the risks inherent in single-country," said the CII-McKinsey report.

In 2002, China's manufacturing exports were $300 billion while India lagged behind at $40 billion.