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An increased focus on manufacturing and a decreased competitive advantage for other international manufacturing hubs such as China has people betting on listed manufacturing plays.
Foreign brokerage and financial services firm Barclays Securities (India) has come out with a report suggesting that the increased focus on manufacturing could be a game-changer for exports.
In its India Equity Strategy report dated July 15, it said that the Union Budget seemed to signal an intent to boost manufacturing and take bold steps to revive manufacturing exports.
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“India could be a perfect substitute due to 1) large and growing domestic market; 2) the availability of a skilled work force (3.7-4mn graduates per year according to National Association of Software and Services Companies); 3) numerous workers with strong engineering skills; and 4) currency depreciation (28% in three years),” said the report authored by.
Sectors which could benefit from the manufacturing boom include defense, pharma, auto as well as transportation companies, according to the report.
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The National Manufacturing Policy announced by the previous government which is yet to be implemented, targetted a 25% share in the country’s economic output for manufacturing. The policy was also aimed at creating a 100 million jobs over the next ten years, noted the report.
Similar targets from the current government could be a game changer, it said.
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