A variety of problems are preventing manufacturing companies in India from achieving global scale. For one thing, India has a much higher rate of inflation than other countries do.
The world's four biggest economies―the United States (US), China, Japan and Germany—account for 45 percent of the world's gross domestic product (GDP). They are also home to manufacturing companies with massive scale—global giants. In 2012, these four nations together exported manufactured goods worth US$4.8 trillion—more than
80 percent of their total merchandise exports.
Today, China produces 725 million tons of steel, about half the world's production and seven times more than the next largest steel producer. Six of the world's 10 largest steel-producing companies are Chinese. Five of the 10 biggest semiconductor manufacturers are based in the US, accounting for 31 percent market share. Germany is home to two of the five largest manufacturers of wind turbines, and has more wind farms than second-placed US, third-placed Spain and fourth-placed Denmark combined. By contrast, India is home to few industrial giants, and manufacturing's contribution to India's economic growth has been relatively paltry. Compared with China and Germany, where more than two-thirds of exports are manufactured products, India's manufacturing exports constitute just about a third of the total.
Saurabh Bhatnagar is Managing Director, Resources Operating Group at Accenture India
Manish Chandra is Managing Director and Lead – Operations Strategy, Accenture Strategy at Accenture India
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