The proposed national manufacturing policy (NMP) is expected to help increase the contribution of the sector to GDP from the current 16 percent to 25 percent by the turn of 2025, a report by KPMG said Wednesday.
The Environment Ministry is reportedly opposed to the provisions of a special purpose vehicle in the new policy, which according to it, would create conflicts of interest.
The KPMG report noted that India has moved up the value chain of manufacturing as more global companies are making it a part of their global supply chain.
"Companies are looking to build their R&D centres as India is increasingly getting recognised for high value goods requiring a fair amount of engineering precision and quality."
"The manufacturing sector is diversifying and clearly positioned for growth, due to conditions on the ground which the global players are using to their advantage with healthy respect for unpredictability and volatility around the world," Rekhy said.
"Companies are still closely watching cash expenditures, and while there is more emphasis now on growth than two years ago, many are developing approaches to more tightly scrutinise new product development expenditures and expected return on investment," said KPMG USA Principal Advisory for Business Effectiveness Doug Gates in the report.
Large global manufacturers are setting their sights on topline growth over the next two years, focusing on new products, strategic acquisitions and alliances, innovation and increasing production capacity in high-growth markets.
Bolstering the growth agenda are stronger investments in supply chain risk management to mitigate the impact of continued market volatility, the report said.
The KPMG annual survey of 220 manufacturing executives from global companies with at least USD 1 billion in revenue shows that businesses will focus on topline growth as a priority in the next two years, followed by R&D, customer relationships and cost containment.