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Competitiveness of India's Manufacturing Sector: An Assessment of Related Issues

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  • L, lakshmanan
  • S, Chinngaihlian
  • Raj, Rajesh
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    Abstract

    This paper provides an analytical abstract of various parameters of manufacturing competitiveness of the Indian economy. India's manufacturing exports have risen impressively in the past decade or so and found to be directly linked to the world GDP and inversely related to real effective exchange rate (REER). Indian manufacturing industries have certain inherent strengths and advantages in having a relatively inexpensive, adequate and skilled labour force, cost-effective and competitive prices of goods produced, large manufacturing base and proximity to fast growing Asian markets. India is one of the leading producers and exporters in a number of commodities and enjoys significant advantages in terms of lower labour costs as compared to other economies. Nevertheless, India's competitiveness is lost on account of lower labour productivity and higher input and material costs. To improve the competitiveness of the Indian manufacturing goods, issues like further diversification of export basket, upgradation of export quality, improvement in productivity, increased technology intensity in production, enhanced R&D activity, encouraging business environment, less cumbersome regulatory environment, flexible labour laws, removal of infrastructural bottlenecks and SME related issues need attention of all concerned.

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    File URL: http://mpra.ub.uni-muenchen.de/9801/
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    Bibliographic Info

    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 9801.

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    Date of creation: 07 Jan 2007
    Date of revision: 16 Jan 2008
    Publication status: Published in RBI Occassional Papers Summer 2007.Vol. 2(2008): pp. 33-77
    Handle: RePEc:pra:mprapa:9801

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    Keywords: Manufacturing sector; Competitiveness;

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    1. Hooper, Peter & Larin, Kathryn A, 1989. "International Comparisons of Labor Costs in Manufacturing," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 35(4), pages 335-55, December.
    2. Aditya Bhattacharjea, 2004. "Trade and competition policy," Indian Council for Research on International Economic Relations, New Delhi Working Papers 146, Indian Council for Research on International Economic Relations, New Delhi, India.
    3. Bishwanath GOLDAR & Suresh Chand AGGARWAL, 2005. "Trade Liberalization And Price-Cost Margin In Indian Industries," The Developing Economies, Institute of Developing Economies, vol. 43(3), pages 346-373, 09.
    4. B.N.Goldar, 2004. "Productivity trends in Indian manufacturing in the pre- and post- reform periods," Indian Council for Research on International Economic Relations, New Delhi Working Papers 137, Indian Council for Research on International Economic Relations, New Delhi, India.
    5. Rashmi Banga & B.N.Goldar, 2004. "Contribution of services to output growth and productivity in Indian manufacturing: Pre and post reforms," Indian Council for Research on International Economic Relations, New Delhi Working Papers 139, Indian Council for Research on International Economic Relations, New Delhi, India.
    6. Lall, Sanjaya, 1999. "India's Manufactured Exports: Comparative Structure and Prospects," World Development, Elsevier, vol. 27(10), pages 1769-1786, October.
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