India emerges as key global supply chain player despite challenges: BofA report

  • Industry News
  • Oct 23,23
India's potential as a manufacturing powerhouse and export hub is hindered primarily by high logistics costs and a significant infrastructure gap, states the report.
India emerges as key global supply chain player despite challenges: BofA report

Following the global pandemic, there is a growing trend worldwide to diversify supply chains, and India is emerging as a prominent alternative supplier, as per a report by BofA Global Research.

India's potential as a manufacturing powerhouse and export hub is hindered primarily by high logistics costs and a significant infrastructure gap, states the report. Despite these challenges, India is already a major exporter of intermediate goods. The country is gradually shifting its export focus towards final consumer goods and advanced manufacturing value-added items, positioning itself higher in the global value chain, according to BofA economists.

Contrary to common belief, India has a substantial role in the global value chain, being a leading exporter of agriculture products, intermediate goods, IT, and IT-enabled services. Recent data from the World Bank indicates that India's Global Value Chain (GVC) output accounts for 3.17% of its total output, making it the fifth highest globally after China, the US, Japan, and Germany.

The report attributes India's attractiveness to certain policies and initiatives, including designating 461 districts as export hubs, establishing export promotion committees, implementing production-linked incentive schemes (PLIS), and developing three major ports under the Maritime Vision 2030 initiative.

To overcome the challenges, the Indian government is actively working on reducing logistics costs, which currently stand at 13.5% of the GDP, aiming to bring it down to 7.5% by 2029. Additionally, India's per capita infrastructure investment is below the global average at $88.6 (in constant 2015 terms). The government's focus is on targeted investment and policy measures to bridge the infrastructure gap, as evident in the increase in capital outlay as a percentage of GDP from 1.6% in FY2012 to 2.73% in FY2024, as outlined in recent union budgets.

Source: Money Control

Related Stories

Auto & Auto Components
Pricol Partners with Italy's Domino to Advance Two-Wheeler Control Technologies

Pricol Partners with Italy's Domino to Advance Two-Wheeler Control Technologies

Pricol Limited joins hands with Italy’s Domino S.r.l. to deliver advanced two-wheeler handlebar control systems across India and Southeast Asia, reinforcing its innovation-driven growth strategy.

Read more
Auto & Auto Components
AM/NS India opens Continuous Galvanising Line for High-Strength Automotive Steel

AM/NS India opens Continuous Galvanising Line for High-Strength Automotive Steel

New facility engineered to manufacture world-class specialised, high-grade steel for automotive applications, with strength levels up to 1180 MPa; to substitute imports. The modern unit is part of t..

Read more
Aerospace Defence
BonV Aero Advances Dual-Use eVTOLs for Defence and Disaster Relief Sectors

BonV Aero Advances Dual-Use eVTOLs for Defence and Disaster Relief Sectors

BonV Aero’s indigenous UAVs support both the Indian Army and emergency services, showcasing their utility during flash floods in Sikkim and operations along the LAC.

Read more

Related Products

Heavy Industrial Ovens

INDUSTRIAL SUPPLIES

Hansa Enterprises offers a wide range of heavy industrial ovens.


Read more

Request a Quote

High Quality Industrial Ovens

INDUSTRIAL SUPPLIES

Hansa Enterprises offers a wide range of high quality industrial ovens. Read more

Request a Quote

Hydro Extractor

INDUSTRIAL SUPPLIES

Guruson International offers a wide range of cone hydro extractor. Read more

Request a Quote

Hi There!

Now get regular updates from IPF Magazine on WhatsApp!

Click on link below, message us with a simple hi, and SAVE our number

You will have subscribed to our Industrial News on Whatsapp! Enjoy

+91 84228 74016