FDI infusion will boost the country’s industrial sector, according to the Ministry of Finance

With increased investment in the industry, India’s domestic manufacturing sector is expected to get greater external assistance in the coming months.

Reindustrialization is becoming the focus of an increasing number of US and European organizations, according to the Ministry of Finance’s monthly economic assessment. As part of the China Plus One plan, these organizations’ main goal is to strengthen supply chain resilience, which might be very advantageous for India’s manufacturing companies.

According to the monthly analysis published by the Ministry of Finance, western economies are diversifying their supply chains in order to lessen their reliance on China. India is a good option for this kind of diversification.

India’s exports rose in April as a result of the US economy being stable, consumer confidence in Europe, and the country’s somewhat better economic activity. India’s exports, comprising goods and services, rose from USD 60.40 billion to USD 64.56 billion (Y-o-Y) in April, according to statistics from the Ministry of Commerce.

The monthly evaluation also emphasizes how well the Indian economy’s industrial and service sectors are doing, propelled by strong local demand and bolstered by cautious foreign demand. It is anticipated that this upward tendency will continue when the state of the world economy improves.

According to the EXIM Bank of India’s prediction, the first quarter of FY25 will see a double-digit increase in goods exports, indicating even more promising times ahead for India’s manufacturing sector. Increased investments and India-favoring strategic changes in global supply chains are the main drivers of this positive outlook.

India’s manufacturing industry looks to benefit from these trends as global economies strive for stability and growth, harnessing both internal capabilities and increased external assistance.

The Commerce Ministry reports that India’s record exports of USD 778 billion were made during FY23–24.

34 million smartphone devices were supplied by India in the first quarter of 2024. Additionally, it showed a YoY (year over year) gain of 11.5%, marking the third consecutive quarter of growth in shipments, according to International Data Corporation’s Worldwide Quarterly Mobile Phone Tracker.

In the Financial Year (FY) 2023–2024, India’s defense exports reached a record of Rs 21,083 crore, up 32.5% over the previous fiscal year’s Rs 15,920 crore.

The manufacturing industry received a total of USD 20.8 billion in foreign direct investments (FDI) via equity inflow from October 2019 to December 2023, as reported by the United States. This information comes from legislative statistics. The top five states with the most investment are Tamil Nadu (4.7%), Delhi (13.5%), Gujarat (16.3%), Maharashtra (29.6%%), Karnataka (22.6%), and Gujarat (16.6%).

Nirmala Sitharaman, the finance minister, has also recently called for further support for the manufacturing industry.

Sitharaman said that although many believe India has more potential in services, manufacturing must also be prioritized and supported by increased government spending and legislation.

“Manufacturing has to rise, and India needs to boost its manufacturing role in global value chains by enacting legislation. Therefore, we must increase the complexity of our product manufacturing and look at how to get the best possible governmental backing for it, the minister said.