New Delhi: The Government aims at increasing the share of manufacturing in the country's Gross Domestic Product (GDP) from 17 to 33 per cent, Minister of State for Industry Ashwani Kumar said on Thursday.

Emphasising the importance of manufacturing in India's growth, he said the sector contributed to about 53 per cent of exports and received more than two-thirds of total foreign investments.

It accounted for 11 per cent of the workforce of about 45 million.

The Minister was delivering the keynote address at the Indo-U.S. Economic Summit organised by the Indo-American Chamber of Commerce here.

Referring to economic ties between the two countries, he said Indian exports of manufactured goods to the U.S. were rising faster in percentage terms than China's, though from a much smaller base. A majority of the U.S. firms which invested in India reported double-digit, year on year growth.

Mr. Kumar quoted a McKinsey Global Institute study to highlight the point that when U.S. companies moved their business services offshore to India, economic benefits accrued to both countries.

The Minister said the Government was taking all steps to simplify investment procedures, including approvals.

He quoted studies, which have shown that a full-fledged manufacturing facility in India can be set up at 60 to 80 per cent of the cost incurred in a developed market.

Backbone of economy

In particular, he highlighted the importance of small and medium enterprises.

"Strengthening the SME sector is one of the principles which the Commerce and Industry Ministry is following. Ultimately the SMEs will be the backbone of a strong Indian economy."

V. Govindarajan, member-secretary, National Manufacturing Competitiveness Council (NMCC), said a sub-committee to recommend a strategy for growth of the manufacturing sector would begin its first round of discussions within four weeks.

It was set up process the recommendations of the National Strategy on Manufacturing.

The sub-committee, headed by NMCC chairman V Krishnamurthy, was asked to initially focus on six key areas — textiles and garments, food and agro-processing, IT hardware and electronics, leather and footwear, skill development and problems of small and medium industries.

The views of various ministries and other stakeholders were sought on these priority sectors.

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