India is rapidly becoming a leading destination for foreign investment in the manufacturing sector, with foreign direct investment (FDI) inflows surging nearly 69 per cent over the past decade, reaching $165.1 billion, according to the government.
Jitin Prasada, Minister of State for Commerce and Industry, revealed that FDI equity inflows in manufacturing during the past ten financial years (2014-24) increased significantly from $97.7 billion in the previous decade (2004-14).
In a statement to the Rajya Sabha, Prasada noted that total FDI inflows amounted to $383.5 billion over the past five financial years (2019-20 to 2023-24), largely driven by production-linked incentive (PLI) schemes.
A recent HSBC survey highlighted continued robust expansion in India's manufacturing sector, with July's Manufacturing Purchasing Managers' Index (PMI) standing at 58.1, nearly the same as June’s 58.3. The PMI has been above the 50-mark, indicating growth, since July 2021, marking the longest expansionary phase in 11 years.
Government data also revealed that 755 applications have been approved across 14 key sectors under the PLI schemes, with investments totalling Rs 1.23 lakh crore (approximately $15 billion) as of March. This has led to the creation of around 8 lakh jobs.
The PLI schemes, with an outlay of Rs 1.97 lakh crore (over $26 billion), aim to boost India's manufacturing capabilities and exports. Key sectors include mobile and electronic component manufacturing, pharmaceuticals, medical services, automobiles and auto components, steel, telecom products, textiles, and food.
Prasada stated that the PLI schemes are designed to attract investment in critical sectors and advanced technologies, enhance efficiency, and ensure Indian manufacturers become globally competitive.
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