Consistent 7-8% growth within reach, but manufacturing pivot crucial: CII president Memani

India’s macroeconomic resilience offers a unique window to deepen manufacturing, push exports, and formalise strategic trade partnerships amid slowing global growth, Confederation of Indian Industry (CII) president Rajiv Memani told Mint in an interview.

“India has been the fastest-growing large economy in the world for the last three years, something that hasn’t happened before,” Memani said.

“I think we are standing at a really strong position. Growth is important, but also equally important is how strong your (corporate) balance sheet is. And India’s balance sheet, at multiple levels, is very healthy,” he added.

Memani pointed to reduced fiscal deficit, strong banking sector health, and a vibrant capital market, asserting that “the strength of the institutional framework of India, the political and policy stability, if I compare with most markets in the world, it’s very strong.”

To be sure, India’s fiscal deficit, a shortfall in a government's income compared with its spending, has improved significantly—from 9.3% of GDP in FY21, when pandemic-related spending surged, to 4.8% in FY25.

As part of the government's fiscal consolidation glide path, the centre is targeting a fiscal deficit of 4.4% of GDP in the current financial year 2025-26.

Also read: As Trump tariffs reshape global trade, India must adapt fast

Manufacturing key to unlocking growth

While India’s services exports remain robust, Memani emphasised the need for a sharper manufacturing strategy.

“If you look at countries that had breakout growth, Germany, Japan, Korea, China, a lot of it was driven by manufacturing exports. India has to pivot more strongly to manufacturing from where we are," he said.

Acknowledging China’s dominance in global manufacturing, Memani said that India must identify and focus on its own areas of strength—such as electronics, semiconductors, defence, and labour-intensive sectors—to carve out a competitive edge.

"There is massive competition from China. Obviously, they have been at this for a long time and developed some very deep competencies," he said.

"So we have to find our own (sweet spots), where we can dominate," he added.

Also read: Indian businesses hoping for US trade deal ahead of tariff deadline, says CII's Memani

Private push emerging

On domestic investment trends, Memani noted that public capital expenditure—particularly the central government’s infrastructure-led growth push—continues to outpace private sector capex. 

However, he pointed out that private investments are gaining momentum in select sectors, with some witnessing a more aggressive pickup than others.

“There are lots of new sectors opening up... in electronics, semiconductors, aerospace and defence, you are seeing new capex happening. Cement has a lot of brownfield expansion. But yes, MSMEs need to accelerate," he said.

“Urban consumption hasn’t grown to the extent people anticipated. That’s one area of weakness,” he said, citing high interest rates and inflation.

“But as global uncertainty settles, and inflation and rates come down, I believe it will come back," he added.

Public capex to continue to anchor growth

Memani credited the government’s aggressive infrastructure spending as a key engine of near-term growth.

“Government capex has shown 10–12% growth annually in the past few years. And I think India’s logistics cost still has a way to go. There is still a lot of investment opportunity in railways, logistics, airports, and nuclear power," he said.

He also highlighted the need for capital recycling in infrastructure.

“Once you invest, you can monetize—through REITs, InvITs—and then use that capital more efficiently in areas where capacity is still needed," he added.

FTAs are welcome

Memani also strongly backed an India-US trade deal, especially to avoid fresh tariffs post-July 9:

“A large number of (CII) members want India to enter into some form of India-US FTA so that additional tariffs are not imposed. It also sends a message that both countries are serious about expanding trade,” he said.

While he sees opportunities in sectors like pharmaceuticals, electronics, and auto components, he acknowledged the risks arising from any potential trade deals.

“Yes, some sectors face competitiveness issues. But the government has deeply engaged with stakeholders, and I’m confident they’re negotiating carefully," he said.

He emphasised that India’s FTAs with developed economies must be strategic, not just growth-driven.

Reform bottlenecks persist

Memani acknowledged the Centre’s continued push for regulatory reforms but pointed out that significant hurdles remain at the state and municipal levels.

“Land, environmental clearances, labour compliance, and reducing ‘inspector raj’ are still pain points. The number of approvals—sometimes between 150 to 400—for a manufacturing unit is just too high,” he said.

He added that CII and other industry bodies are actively working with governments to streamline regulations by identifying redundant laws, automating permissions, and pushing for time-bound approvals, especially in sectors such as healthcare, chemicals, and pharmaceuticals.

Growth likely to top 7%

Looking ahead, Memani projected steady medium-term economic growth.

“There is no reason to be negative. We are in a strong position globally. Yes, per capita income must rise—but the only way to do that is to grow the economy fast," he said.

He pegged real GDP growth in the 7–8% range annually in the near term.

“In a turbulent global environment, if we manage 7% growth, that’s a great outcome. We have one of the best talent pools, strong institutions, and rising global relevance," he added.

Also read: Indian economy to grow 6.4-6.7% in FY26 amid geopolitical risks, says CII president; 3-tier GST structure backed