India could emerge as the fourth-largest manufacturing economy of the world, if the sector grows by 11 per cent for the next 15 years, a report said.
The country's manufacturing sector, which 13th largest in the world, expanded at 6.8 per cent over the last 10 years (1999-2009). The US is the largest manufacturing economy followed by China, Japan and Germany.
The CII-BCG report on Indian manufacturing sector said that to become the fourth largest manufacturing hub, the gross assets would need to increase by Rs 55-80 lakh crore by 2025.
Exports growth would also need to accelerate to 18-20 per cent from the 11 per cent seen in the last decade and labour productivity should also increase substantially, it said.
"Finally, India will have to produce many more world beaters from the manufacturing sector with 3-4 fold increase in the number of Indian manufacturing companies with annual revenue in excess of $1 billion from 25 today and 4-5 firms with annual revenue in excess of $100 billion," it added.
Manufacturing contributes 15 per cent of India's GDP, 50 per cent of exports and 12 per cent of the workforce.
The report further India will also have to develop a strong enabling infrastructure, exploring new avenues of growth and higher productivity and competitiveness.
"Indian manufacturing has the potential to be the driving force in India’s economic development... Success, however, will require strong commitment, careful planning and willingness to make bold moves on part of both the government and industry...," it added.
On the labour policy for manufacturing industry, the CII-BCG report said India has strong labour laws protecting worker rights, however, these same rights are seen to constrain the growth of large scale manufacturing and also introduce rigidity in the labour market.
"If India has to achieve its growth aspirations, it is critical the policy interventions be made in labour laws be revised to facilitate higher scale, productivity and flexibility while protecting worker rights," it said.
The government today also announced that a national manufacturing policy would be announced by August.
