India slips three notches in competitive index

India's ranking in the Competitive Industrial Performance (CIP) index of the United Nations Industrial Development Organisation (Unido) has slipped by three notches, even as the country's rapid export growth made South Asia the fastest growing region in exports of manufactured goods.

The CIP index combines four main dimensions of industrial competitiveness —industrial capacity, manufactured export capacity, industrialisation intensity and export quality. Industrialisation intensity is a measure that captures the share of manufacturing in GDP.

India led the CIP in South Asia but lost three positions in the global rankings, despite its strong information technology and electronics sector, said the 'Industrial Development Report, 2009' released here by Unido today.

"However, the lowering of India's ranking is not very significant as some smaller countries had a little advantage in some of the CIP variables," said Philippe R Scholtes, Head of South Asia, Unido.

India was ranked 54th in 2005 (as against 51st in 2000), just one rank below Australia that was ranked 53rd (as against 42 in 2000) in the list of 122 countries. However, India's strong export growth made South Asia the fastest growing region in manufactured exports. "Between 2000 and 2005, developing countries gained a world market share in both simple (resource-based and low-technology) and complex (medium and high-technology) manufacturing. South Asia was the fastest growing region, reflecting India's rapid export growth," said the report.

An accelerating shift has been observed in the location of manufacturing from developed to developing countries, the report observed.

In manufacturing value-added (MVA), while East Asia and the Pacific regions had the highest annual growth (almost 9.8 per cent), resulting mainly from the rapid MVA growth in China, the next best performing region was South Asia, with an annual growth rate of 7.9 per cent. "India alone accounts for nearly 80 per cent of South Asian MVA," the report said.

Referring to regional trends in manufacturing, the report said South Asia's performance was driven by India, where electrical machinery and apparatus, iron and steel, nuclear fuel and chemicals sectors clocked rapid growth.