The defect rates of final products are between 5 to 10 times more than those manufacturing units in bigger economies such as the US, EU and Japan, it said.
"About 20 per cent of Indian firms are unable to produce quality products as their equipment and technology have turned out to be obsolete," Assocham said.
Indian firms not only lack quality machineries but also absorption of supporting technologies such as precision measuring, material engineering and product control, Assocham Secretary General D S Rawat said.
The study said manufacturing goods would take longer time to match the global standards as the machineries are highly taxed both on import and excise front. Besides, there are logistics problems that add to manufacturing costs because of country's poor infrastructure.
The study also said research and development activities in India has been primarily government driven and private sector has traditionally made little investment in this area.
