The Indian manufacturing sector has registered gross profits and sales growth rates amounting to double the figures of global manufacturers, according to a Global Benchmark Study by Deloitte.
Preliminary findings indicate that Indian manufacturers are enjoying average sales growth of 15 per cent, compared to the 7 per cent of global peers.
Gross profits of local manufacturers average 16 per cent as the 8 per cent average of global competitors.
"Deloitte's preliminary benchmark findings reveals that industry capabilities in areas such as product innovation, manufacturing quality, and process innovation are driving the performance of Indian manufacturing companies," Deloitte manufacturing industry leader Kumar Kandaswami said in a statement.
The release of the findings from Deloitte's Global Benchmark Study coincides with the World Economic Forum's India Economic Summit being held here.
A separate survey, developed by Deloitte Research in collaboration with the Indian School of Business, New York University revealed that Indian manufacturers on an average have made greater inroads in key areas of operational capabilities such as quality management, than the rest of the world.
To compete effectively in the global market, Indian manufacturers must invest and build scale in crucial areas of production, distribution, and marketing, he added.
Indian manufacturers need to improve visibility into key strategic and operational performance metrics, enhance collaboration with customers and suppliers and increase investments in infrastructure, Kandaswami said.
The median Indian manufacturer surveyed spends 1.5 per cent on research and development as a percentage of total sales as compared to the global industry median of 2.5 per cent. Indian manufacturers may be hampering future growth as current investment levels lag behind sales growth.
Indian manufacturers need to move aggressively to compete globally. Most Indian manufacturers surveyed expect industry growth and geographical expansion to drive business growth over the next three years. A majority of Indian manufacturers plan to expand their operations domestically as well as globalise their operations, the survey revealed.
China and other South East Asian countries were viewed as top destinations especially in areas such as marketing/sales and sourcing. Investment in other international locations for engineering and research & development would be minimal, with Indian manufacturing companies deciding to invest domestically to build capabilities.
