India could become a manufacturing powerhouse

NEW YORK: India could become a manufacturing powerhouse within five to 10 years, while its services have already turned 'red hot,' a report by a global consultancy firm has said.

"Beneath the surface, things are changing rapidly, and India could become a manufacturing powerhouse within five to 10 years," says a report by 'The Boston Consulting Group' and Knowledge@Wharton.

The report titled, "What's Next for India: Beyond the Back Office", said India is in the midst of the most ambitious infrastructure upgrade in its history. Better roads, ports, power and airports could easily nudge the nation's annual GDP growth rate up to a sustainable 8 per cent.

Poor infrastructure, bureaucratic red tape and restrictive labour laws have kept India's manufacturing sector on a backseat, while its services have turned 'red hot', the report said.

"Driven by the emergence of a vast domestic market and relatively low-cost workers with advanced technical skills, more and more multinationals are setting up manufacturing operations in India," it notes and points out that Ford, Hyundai and Suzuki all export cars from India in significant numbers.

"Over the past five or six years, many firms have restructured their manufacturing operations and implemented world-class practices," Arindam Bhattacharya, a partner in BCGFs New Delhi office, said.

Also optimistic is Wharton professor of management Saikat Chaudhuri. "Every major company has India on its radar screen," he said in the report. "It is just a matter of timing."