'$100B exports for India'

By agencies   |   Wednesday, 14 June 2006, 07:00 Hrs
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NEW DELHI: Indian factories are expected to double their annual exports to $100 billion in the next four years, replicating the success of a remote-office industry that has made the South Asian nation a services hub.

Low labor costs and a tradition in precision engineering will draw investments in the manufacturing sector in India, which will emerge as a sourcing destination for overseas companies looking to cut expenses, according to the New Delhi-based Associated Chambers of Commerce and Industry of India (Assocham).

Textiles, engineering, pharmaceuticals and automobile parts are among the industries poised for the fastest expansion, Assocham President Anil Agarwal said.

“The perception of India as a manufacturing center has changed in the West and India is quite hot from the sourcing standpoint," said, Kavan Mukhtyar, Asia Pacific director for transportation at global research company Frost & Sullivan.

Indian labor is still about 15 to 20 percent cheaper than Malaysia and the biggest strength is its engineering skills.

India is trying to narrow the gap with its neighbor China and Southeast Asia as a manufacturing center, drawing companies such as Nokia Oyj, Ford Motor Co. and Toyota Motor Corp. to set up factories in the country. This will enhance India’s export-competitiveness and create jobs for the nation of a billion-plus people.

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