The ever-increasing visibility of Indian story on global front is a positive determinant of India's future. The present paper reiterates India's potential to metamorphose itself into an economic powerhouse in the next two decades. Our economy stands in the departure lounge and if surveys of business and consumer confidence are any indication, India in the long term stands to benefit.
However the paper emphasizes that the issue is not how to celebrate the present uplift in economy and our spirits. The issue rather is to avoid being trapped in the false consciousness the market has created for us and open ourselves up to learning from it and looking beyond it.
There is no doubt that services off shoring do add value and brings in more revenues for our economy. However, India faces a threat from the competitive reality of other countries such as China, Philippines and Vietnam catching up with it. As a consequence, there is a need to acknowledge that what held good in 2005 might not be same in 2025. The paper contributes to the understanding that against the backdrop of services outsourcing, the global opportunity for India's success in 2025 seem to emerge in form of manufacturing outsourcing. It is evident that future would not provide ways to win consistently and in perpetuity. This leads to the discussion on the future trends in the off shoring space and the sectors holding promise for India. The paper focuses its attention on leveraging the opportunity to establish India as a true outsourcing hub, not just in terms of services but in manufacturing too.
The factors that would help India in the 2025 would be the favourable 'demographic dividend' of India-the highest proportion of young workforce by the end of year 2025 in tandem with the emergence of India as the new manufacturing hub. The conventional low-cost manufacturing along with improving capabilities of the labour force is acting as a catalyst to pull in more and more global vehicle manufacturers and vendors. The paper elucidates the benefits of embracing a manufacturing-led outward looking economic orientation in India's context with the contention that manufacturing will actually lubricate the services and agricultural sector. The premise is that while certain service sectors will continue to grow impressively, their overall contribution to economic growth, employment and incomes will not be adequate in itself to meet India's economic growth need. Hence the choice of focus on manufacturing off shoring, which is presently at an embryonic stage, would put India into a commanding position.
The paper also compares and contrasts the issues and potential problems India faces due to India's relatively late start in economic liberalisation. The paper ends with the suggested measures and implications for government as well as Indian manufacturing sector.