Indian Manufacturing : Is real estate to blame for India’s sluggish manufacturing growth? We look at how the sector has contributed to the ambitious ‘Make in India’ campaign.

The slow pace of manufacturing growth in India is frequently criticised. Many argue that, despite reasonable purchasing power, resources, technological know-how, and funding availability, we are unable to compete with countries such as Vietnam or Bangladesh in terms of manufacturing sector growth. Some even blame the real estate sector for India’s slow manufacturing growth. This raises several critical issues:

---

Are you looking for 2 bhk rent in kharghar?

---

• Is real estate a victim or a cause of India’s slow manufacturing?
• Why has ‘Make in India’ remained a mere slogan in Indian real estate?
• Is it only the cost of using indigenous products that discourages their use, or are there larger ecosystem issues at play?

To be fair, real estate export volume and reliance on finishing products have increased since 2014. If it was China yesterday, we now have other global markets to import sanitary products and electrical items from, such as Vietnam, Thailand, and Bangladesh. The lack of progress in indigenous manufacturing is due to cost arbitrage. While foreign companies remain wary of establishing manufacturing bases in India, even domestic manufacturers find high corporate taxes and weak labour reforms a major impediment.

 

How much does Indian real estate contribute to the ‘Make in India’ initiative?

A developer involved in affordable housing projects, who requested anonymity, points out that profit margins are no longer in the double digits. The price difference between Chinese products is the same as the overall project profitability. Cost arbitrage cannot be overlook, and in India, GST on products is an additional challenge. He claims that even with a small project, he uses export items while not directly importing products from China. Quality is, of course, slightly higher when importing from the international market, according to the developer.

disagrees and wonders why we say we haven’t made progress on Make in India. T he civil structure is almost entirely done in-house; finishing, tiles, and so on are manufacture in India, as are the majority of the CP and sanitary factories. As a result, unless there is a significant arbitrage over the product, he does not believe there is any dependency in construction.

When there was steel arbitrage recently, the government took corrective measures on the custom duty. Similarly, when there was inflationary pressure due to fuel prices, the government intervened because commodity prices directly affect us. The same is true for aluminium and copper, UPVC pipes, and any other product.

 

Indian Manufacturing

Nonetheless, there is a huge growth opportunity in terms of ‘Make in India,’ and it is not limited to real estate. Cement and steel, the two most important real estate commodities, are primarily manufacture in India. As a result, manufacturing and Make in India should be prioritise, especially given the current geopolitical situation.

“As a country grows, it consumes more and more resources.” China has one of our largest trade deficits. So, overall, it is not that bad, because the country is growing, and if you are importing to create more and more capital goods, you must account for the country’s incremental demand.”

believes there is an additional forex control angle. If HNIs are restricted from investing abroad and must invest in India, land is the most profitable option among others. “It is inflation-proof, relatively safe from theft (aside from squatters), and circle rates in states like Gujarat, Andhra Pradesh, and a few other states are deliberately kept low.” 

 

Indian Manufacturing : Manufacturing in Indian real estate

• Every year, developers import nearly USD 10 billion in building construction products and services.
• These imports include not only products such as flooring, cement, and home automation, but also services such as technology, consulting, and architects.
• Imports account for nearly 30%-50% of the total project cost in luxury projects.
• The Prime Minister has directed the sector to conduct a cost-benefit analysis of ‘Make in India.’

 

Indian Manufacturing : The road ahead

“How can real estate consume more from ‘Make in India’ manufacturing?” is the question now. However, the question is flawed if it is not in sync with the larger ecosystem. Creating and establishing a manufacturing unit in India presents its own set of challenges. Cheap labour alone would not provide India with a competitive advantage or cost advantage over export items. ‘Make in India’ must go beyond the rhetoric of nationalism, with reforms ranging from lower corporate taxes to labour laws, and the country must become a happy hunting ground for the world’s manufacturers.

 

Reforms are require to support domestic manufacturing.

 

• Reduced corporate tax
• Tax breaks to promote exports
• Labor-reform initiatives
• Contract compliance
• Opposition to retroactive taxation

 

Profitability and client satisfaction are the most important aspects of any business. Why would anyone, including builders, choose a locally manufactured product if foreign manufacturers have an advantage in these two critical areas? As a result, while Indian manufacturers lag far behind their global counterparts in exporting local products, they also lag in selling to Indian businesses. As a result, real estate cannot be held solely responsible for problems that are part of a larger ecosystem.

 

 

 

---

 

You’re looking for Rental Home In Navi Mumbai we have the Best Rental Properties In Navi Mumbai Like Ready to Move & Nearby possession: https://navimumbaihouses.com/property/search/rent/navi-mumbai-all/

 

If you want daily property update details please follow us on Facebook Page / YouTube Channel / Twitter