India is slated to become the world's second-mostcompetitive destination for manufacturing operations, after China, within fiveyears, according to a new study by Deloitte Touche Tohmatsu and the US Councilon Competitiveness.
Brazil will likely occupy the third slot according to thestudy, a national paper reports.
“India is rated this high mainly because of its huge talentpool, its strong domestic demand and the incredible geographic position,” thepaper quoted Deloitte global leader manufacturing Timothy P Hanley as saying.
Hanley added that the expertise India has in services can bereplicated in manufacturing as well provided challenges like education andinfrastructure development are addressed, the paper said.
India's manufacturing sector has made large strides over thepast decade, despite continuing problems with electricity supply andtransportation infrastructure, as well as strict labor laws.
However, most of the growth has been driven by domesticconsumption of items like automobiles, refrigerators and the like, in contrastto China.
Meanwhile India’s manufacturing sector provided some goodnews for economy watchers, posting its highest growth in five months thisNovember, according to the HSBC India Manufacturing Purchasing Managers’ Index(PMI).
The news comes amid concern about a slowdown in India’soverall growth, following the release of data showing GDP growth of only 5.3percent in the quarter ended September 30.
Morgan Stanley also boosted its growth forecast for India to5.4 percent from 5.1 percent for fiscal 2013, according to MoneyControl.com.
According to another national daily, the uptick inmanufacturing was driven by a strong pick up in new orders and improvedpurchasing activity.
The HSBC India Manufacturing Purchasing Managers' Index(PMI) - a measure of factory production -- stood at 53.7 in November, up from52.9 in October, indicating a further improvement in the health of the Indianmanufacturing sector, the paper said.
Morgan Stanley said it raised its growth forecast after theJuly-September quarter beat its expectations, adding that it thinksnon-agriculture GDP growth has hit bottom.
