According to a Federation of Indian Chambers of Commerce & Industry (FICCI) survey, growth in the Indian manufacturing sector is anticipated to continue in the last quarter (January-March) of 2022–23, despite indications that cost pressure has been easing somewhat for the industry over the past few months.
More than 400 manufacturing facilities from both large and SME (Small and Medium Enterprises) segments, with a total annual revenue of more than US$ 121.4 billion (Rs 10 trillion), provided their responses. Additionally, 73% of respondents in the study indicated an increase in their cost of production as a proportion of sales, which is lower than the 94% recorded in the prior survey.
The survey further said that “High raw material prices especially that of steel, increased transportation, logistics and freight cost, and rise in the prices of crude oil and fuel have been the main contributors to increasing cost of production.”
All survey respondents agreed that there was enough funding available from banks and that the industry did not anticipate borrowing rates to increase from the existing going rates.
The survey also considered factors including capacity addition and utilisation, exports, hiring, interest rates, sectoral growth, and the availability of labour, which are crucial for the manufacturing industry.
Based on expectations, the sectors of automobiles, capital goods, cement, electronics, petrochemicals, and fertilisers are likely to grow rapidly, while the remaining sectors of chemicals and pharmaceuticals, textiles, apparel, and textile machinery are predicted to increase moderately.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.