BMI Research, a Fitch group company has come out with a research paper that highlights significant challenges India faces in their ‘Make in India’ initiative.
“Weak infrastructure has long served as a drag on India’s manufacturing performance. Inefficient national rail networks impede access to coal as well as the delivery of imported raw materials to inland factories,” the report says.
The report adds that there is plenty of room for improvement in energy grids, acquisition of lands, improving infrastructure and many more.
“Apart from infrastructure, we expect India’s manufacturing sector to face myriad regulations resulting in fragmented land and labour markets. Reforms have stalled in these areas partly due to the government’s lack of majority in the upper house,” the report mentions.
India has been eyeing to be one of the biggest electronics manufacturing destination in the world and with the rising labour costs in China, many companies are coming to India to make it their manufacturing hub. India needs to sort these issues if it wants to be as successful as China.
BMI Research says that persistent bottlenecks to manufacturing investment will hold back the sector’s expansion and impede catch-up with global manufacturing giants like China and Germany.
By Atanu Kumar Das
