The Manufacturing Sector: Growth Story of India

FOSTERING BETTER TRADE RELATIONS WITH THE WORLD 8 .

Being the fifth largest economy in the world today, India’s contribution of below 3.0% to the world’s merchandise trade only exhibits a vast potential to grow. Through favorable policy environment by the government, and a global initiative towards diversification of manufacturing base from China, we have reasons to believe that this share is likely to rise in the coming years.

The Indian government has been pro-active in its trade relations engagement with important trading partners globally. As per the World Trade Organization, India is currently engaged in negotiations for Free Trade Agreement (FTA) with 16 foreign entities, which is the highest number of negotiations compared with the alternative manufacturing destinations considered here. When these negotiations are closed and FTA signed, India will likely be the second most connected trade partner globally, after Singapore, amongst comparable countries. FTAs are proven and an important tool for economies to promote trade with other countries globally.

INDIA’S CONTRIBUTION TO WORLD’S MERCHANDIZE TRADE

2.50%

INDIA’S BILATERAL TRADE (IN MERCHANDISE) ARRANGEMENTS IN THE LAST 10 YEARS

2.16%

2.13%

2.12%

Free trade agreement status by countries (as of nov-22)

2.06%

2.11%

1.94% 2.10%

2.09%

2.00%

2.06%

40

1.99%

1.88%

1.83%

35

1.58% 1.67%

30

1.50%

25

1.23% 1.34%

20

1.14%

0.94%

1.00%

15

0.80%

0.72%

0.86%

10

0.74%

5

0.50%

0

India

China

Vietnam

Malaysia

Indonesia

Thailand

Singapore

Phillipines

SEZ Policy 2005

Make in India - 2014

PLI Scheme 2021

0.00%

Signed and in effect

Framework agreement signed

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Signed but not yet in effect

Negotiations launched

India’s contribution in Global Merchandize Trade

Source: World Trade Organization Database on Merchandize Trades

Source: Asia Regional Integration Centre, ADB

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Cushman & Wakefield

The Manufacturing Sector Growth Story of India

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