Manufacturing Industry In India

June 29, 2010Manufacturing Industryby EconomyWatch


The manufacturing industry in India, has all the qualities which enhance economic development,increase the productivity of the manufacturing industry and face competition from the global markets. The Manufacturing industry in India is believed to have the potential of improving the economic condition of India.

Indian manufacturing industry: Research findings

Studies conducted on the manufacturing industry has concluded that India has a working population of 75%. Out of this, only 600 million have acquired education till middle school. Due to this reason, the manufacturing industry in India , which is labor intensive, can provide the requisite number of employment units in the country. Studies have indicated that the productivity of the manufacturing industry in India is approximately 1/5th of the productivity in the manufacturing industry of United States Of America. It is about ½ as compared to the productivity levels in South Korea as well as Taiwan. Labor productivity has escalated only to a small extent in case of India in comparison to United States Of America, on the contrary, labor productivity has increased manifold in countries like Taiwan and Korea.

Manufacturing industry in India and exports:

Exports of manufactured goods in India accounted for 75% in comparison to exports of manufactured goods all over the world. Owing to the performance manifested by the export sector in India, the scenario indicates that there is less competition in the manufacturing segment. Absence of competition is also established by the fact that in spite of reducing the tariff in the early and mid 90s, India continued to be one of the protected economies of the world. Contribution of India's export towards international market grew from 05% to 0.7% during 1990 to 2000. During the same period, Malaysia, China, Thailand and South Korea, registered almost double increase in exports.

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