Competitiveness of the Indian Manufacturing Sector: An Inter-Industry Perspective

Competitiveness is a concept commonly used in economics, ranging from the analysis of firms to the analysis of countries. This study examines the competitiveness of the Indian manufacturing sector using the composite index approach. The result reveals that capital-intensive industries are more competitive than labor-intensive industries and foreign-owned firms are more competitive than domestic firms. The determinants of competitiveness derived from the FGLS model indicate that the firms’ external factors such as ICT and infrastructure positively affect firms’ competitiveness. Finally, the empirical analysis of the study supports the “learning by exporting” hypothesis from export to competitiveness in the Indian manufacturing sector.