India Achieves 2nd Highest Volume Growth Rate in Manufacturing

India realized out sized growth in physical volume in manufacturing, reported by a survey conducted by  MAPI foundation, USA jointly with the United Nations, with manufacturing value-added increasing 10.5% a year during the decade 2003-13.

China is the ‘Numero Uno’ with physical volume growth at a very strong 11.0% annual rate during the same period.

However in the share of global manufacturing, India remained at distant 10th position with China holding the pole position. Even Brazil remained ahead of India. India’s share of global manufacturing value added has been reported at just 2% by the report while China achieved 23.2% share.

China displaced the United States as the largest manufacturing nation in 2010 and widened its lead in 2013, according to recently published data from the United Nations. Manufacturing value-added in China totalled $2.74 trillion in 2013 compared with $2.03 trillion for the United States

Again coming to per capita value added in manufacturing, India remained at last of the 15 countries taken up for the study.  India’s per capita value addition during 2013 was reported to be less than 100 US Dollar whereas Indonesia achieved nearly 900 US dollar value addition, per capita and Brazil, about 1200 US dollar.

In terms of per capital value addition in manufacturing, which can be taken as a measure of national productivity and Quality levels, Germany lead the world with 9000 Dollar per capita value addition in 2013. Korea comes next and China at a distant 10th position.

It is interesting to note that while in overall manufacturing and total value addition in manufacturing, China is ahead of the developed world, in the mapping of per capita value addition, the ranking is as per expectations, developed world at the top and developing are trailing.

Commenting on the phenomena, an expert on manufacturing commented that this is another classic case of ‘reverse smile’ where the developing nations trudging with the volume load in manufacturing and the developed nations monopolising the high value activities….R&D, design, tooling, marketing etc. To reverse the trend countries like India should take up Research and Development of new products and protect the intellectual properties developed, he commented.

Interestingly, the recent reporting of the Ministry of Commerce mention   about a high volume growth rate in export from India during  2015, in many important product segments, but negative growth in dollar  term due to lower unit value realisation.