NATIONAL MANUFACTURING s3. manufacturing competitiveness council enhancing competitiveness of ... 4 leather and footwear industry ... the indian leather and footwear industry

  • View
    241

  • Download
    8

Embed Size (px)

Text of NATIONAL MANUFACTURING s3. manufacturing competitiveness council enhancing competitiveness of ... 4...

  • NATIONAL MANUFACTURING COMPETITIVENESS COUNCIL

    Enhancing Competitiveness of Indian Manufacturing Industry: Assistance in Policy Making

    Final Report

    March, 2009

  • Enhancing Competitiveness of Indian Manufacturing Industry: Assistance in Policy Making

    Final Report

    DISCLAIMER CRISIL Risk and Infrastructure Solutions Limited (CRIS), a subsidiary of CRISIL Limited, has taken due care and caution in preparation of this Report. This Report is based on the information obtained by CRIS from sources, which it considers reliable. CRIS does not guarantee the accuracy, adequacy or completeness of any information contained in this Report and is not responsible for any errors or omissions, or for the results obtained from the use of such information. This Report should be used in its entirety only and shall not be reproduced in any form without prior permission from CRIS. CRIS and any of its directors, representatives or employees do not accept any liability for any direct, consequential or perceived loss arising from the use of this Report or its contents. CRIS specifically states that it has no financial liability whatsoever to the users of this Report.

  • Enhancing Competitiveness of Indian Manufacturing Industry: Assistance in Policy Making

    Final Report

    TABLE OF CONTENTS

    LIST OF FIGURES...................................................................................................................................i LIST OF ABBREVIATIONS.................................................................................................................... iv EXECUTIVE SUMMARY....................................................................................................................... vii

    1 ASSIGNMENT BACKGROUND............................................................................................................. 1

    2 ECONOMIC ANALYSIS......................................................................................................................... 3

    2.1 INDIAS POSITION IN THE GLOBAL ECONOMY............................................................................... 3 2.2 LOCATING MANUFACTURING IN THE INDIAN ECONOMY ............................................................. 9 2.3 SHARE OF THE THREE INDUSTRIES COVERED BY THE ASSIGNMENT.....................................13 2.4 FREE TRADE AGREEMENT (FTA)/REGIONAL TRADE AGREEMENT (RTA).................................15

    3 TEXTILES AND GARMENTS INDUSTRY ............................................................................................18

    3.1 TEXTILES AND GARMENTS INDUSTRY IN INDIA AND WORLD ....................................................18 3.2 VALUE CHAIN OF THE TEXTILES AND GARMENT INDUSTRY......................................................20 3.3 MAJOR STATES IN THE INDIAN TEXTILES AND GARMENTS INDUSTRY....................................23 3.4 COVERAGE OF PRIMARY SURVEY.................................................................................................26 3.5 FINDING FROM PRIMARY SURVEY FOR TEXTILES AND GARMENTS INDUSTRY .....................27 3.6 VALIDATION THROUGH SECONDARY DATA AND ANALYSIS.......................................................29 3.7 COMPETITIVE BENCHMARKING......................................................................................................38 3.8 SUPPLY CHAIN COMPETITIVENESS OF TEXTILES & GARMENTS INDUSTRY ...........................42 3.9 ISSUES TO BE ADDRESSED FOR TEXTILES & GARMENTS INDUSTRY......................................43 3.10 RECOMMENDATIONS FOR TEXTILES AND GARMENTS INDUSTRY..........................................44

    4 LEATHER AND FOOTWEAR INDUSTRY ............................................................................................48

    4.1 LEATHER AND FOOTWEAR INDUSTRY IN INDIA AND WORLD ....................................................48 4.2 VALUE CHAIN OF THE LEATHER AND FOOTWEAR INDUSTRY ...................................................50 4.3 MAJOR STATES IN THE INDIAN LEATHER AND FOOTWEAR INDUSTRY....................................51 4.4 COVERAGE OF PRIMARY SURVEY.................................................................................................53 4.5 FINDING FROM PRIMARY SURVEY FOR LEATHER AND FOOTWEAR INDUSTRY .....................54 4.6 VALIDATION THROUGH SECONDARY DATA AND ANALYSIS.......................................................57 4.7 COMPETITIVE BENCHMARKING......................................................................................................61 4.8 SUPPLY CHAIN COMPETITIVENESS OF LEATHER AND FOOTWEAR INDUSTRY ......................64 4.9 ISSUES TO BE ADDRESSED FOR LEATHER AND FOOTWEAR INDUSTRY.................................65 4.10 RECOMMENDATIONS FOR LEATHER AND FOOTWEAR INDUSTRY..........................................66

    5 FOOD AND AGRO PROCESSING.......................................................................................................70

    5.1 FOOD AND AGRO INDUSTRY IN INDIA AND WORLD ....................................................................70 5.2 VALUE CHAIN OF THE FOOD AND AGRO INDUSTRY ...................................................................72 5.3 MAJOR STATES IN THE INDIA IN FOOD AND AGRO INDUSTRY ..................................................73 5.4 COVERAGE OF PRIMARY SURVEY.................................................................................................74 5.5 FINDING FROM PRIMARY SURVEY FOR FOOD AND AGRO INDUSTRY......................................75 5.6 VALIDATION THROUGH SECONDARY DATA AND ANALYSIS.......................................................77 5.7 COMPETITIVE BENCHMARKING......................................................................................................88 5.8 SUPPLY CHAIN COMPETITIVENESS OF FOOD AND AGRO INDUSTRY ......................................91 5.9 ISSUES TO BE ADDRESSED FOR FOOD AND AGRO INDUSTRY.................................................92 5.10 RECOMMENDATIONS FOR FOOD AND AGRO INDUSTRY ..........................................................94

    6 COMMON RECOMMENDATIONS FOR ALL SECTORS ...................................................................100

    6.1 SPECIALISED INTERMEDIARY FOR CONSOLIDATION OF FOREX RISK EXPOSURE ..............100 6.2 CHANGE IN LABOUR LAWS APPLICABLE TO ALL THREE INDUSTRIES....................................100 6.3 DEDICATED POWER SUPPLY ARRANGEMENTS FOR CLUSTERS ............................................102

    7 PRIORITISING OF RECOMMENDATIONS BY NMCC ......................................................................104

    ANNEXURE List of People Met During Primary Survey...................................................................... 1

  • Enhancing Competitiveness of Indian Manufacturing Industry: Assistance in Policy Making

    Final Report i

    LIST OF FIGURES Figure 2-1 : Real GDP Growth Rates of India and Other Countries................................................................ 3

    Figure 2-2 : Share of India in GDP, Exports and Population in the world........................................................ 4

    Figure 2-3 : Exports/GDP Ratio and Exports/Population Ratio ....................................................................... 5

    Figure 2-4 : Balance on Current Account as a Percent of GDP ...................................................................... 6

    Figure 2-5 : Foreign Direct Investment Flows in India and the world .............................................................. 7

    Figure 2-6 : Share of Primary, Secondary and Tertiary Sectors in GDP (at factor cost) of India..................... 9

    Figure 2-7 : Share of Manufacturing in GDP (at factor cost) of Secondary Sector.........................................10

    Figure 2-8 : Year on Year Growth in Primary, Secondary, Tertiary and Manufacturing Sectors ....................10

    Figure 2-9 : Year on Year Growth in Secondary Sector in Apr-Sep, 09 .........................................................11

    Figure 2-10 : Year on Year Growth in Manufacturing Sectors in Apr-Sep, 09................................................11

    Figure 2-11 : Employment and Unemployment Details in India (in crore) ......................................................12

    Figure 2-12 : Sector-wise Share of Employment............................................................................................12

    Figure 2-13 : Employment in Manufacturing Industry in 2004-05...................................................................13

    Figure 2-14 : Share of Three Sectors in Total GDP (at factor cost) and Manufacturing.................................13

    Figure 2-15 : Share of Three Sectors in Exports of Commodities from India .................................................14

    Figure 2-16 : Share of Three Industries in Exports of Commodities from India..............................................14

    Figure 2-17 : Employment in the Organised Sector in Manufacturing in 2004-05 ..........................................15

    Figure 2-18 : Employment in the Unorganised Sector in Manufacturing in 2005-06 ......................................15

    Figure 2-19 : Bilateral FTAs of India and competing countries.............................