New Delhi: India’s manufacturing scale is likely to go up. Its exports will reach $1 trillion by fiscal year 2027-28 amid favourable trends in manufacturing and growth in priority sectors, said Bain & Company in a report titled, ‘The Trillion-Dollar Manufacturing Exports Opportunity for India.”
The six sectors that have made good progress in export growth are chemicals, autos, electronics, pharmaceuticals, textiles, and industrial machinery.
People’s interest in electric vehicles is a healthy sign in the automobile sector, contributing up to $5 billion to this export growth.
The report claims that six megatrends that have been prioritised over the past two years have fueled India’s export development.
This includes increased merger and acquisition (M & A) activity, increased private equity/venture capital (PE/VC)-led investment in manufacturing, advantages for India in specific manufacturing sectors, government initiatives to support manufacturing across the country, capital expenditure infusion into manufacturing sectors, and supply chain diversification.
Despite being the sixth-largest economy in the world and contributing 3.1% to the world GDP, India’s export contribution to global trade is only 1.6%. In contrast, China’s contribution to global trade is 15%, while that of the US stands at 8.3%, Germany at 7.9%, Japan at 3.7%, and the UK at 2.3%.
While manufacturing exports have traditionally grown between 5% and 10% pre-pandemic, the sharp rise in exports last year — particularly in the past few months — is attributable to the significant increase in manufacturing’s share of the country’s exports.