According to a recent study conducted by the Federation of Indian Chambers of Commerce and Industry (FICCI), the outlook for India’s manufacturing sector for the third quarter ending December 2015, appear to be weakening and this is primarily due to sustained sluggish exports as well as domestic factors like poor demand conditions, high interest costs and other such factors.
“The percentage of respondents expecting higher growth in Q-3 has gone down to 55 percent as compared to 63 percent for Q-2 (July-September 2015-16),” according to a FICCI survey.
“The survey had earlier indicated revival in the manufacturing activity in Q-2 of 2015-16, which seems to be slowing down little bit in Q-3 now,” the industry chamber said.
Poor demand conditions, high cost of borrowing, delayed clearances and cost escalation are among the major constraints still affecting expansion plans of the survey respondents.
The government has been giving impetus in the manufacturing sector but a lot needs to be done in order to ensure that there are FDI inflow as well domestic manufacturers being encouraged to manufacture in this country.
The survey reported that 10 out of 12 sectors were likely to witness low to moderate growth.
However, the capital goods and auto sectors are likely to see strong growth of over 10 percent in the third quarter, it added.