It is fast emerging as one of the top destinations for foreign investments in the manufacturing sector. In the last decade, FDI in the sector grew almost 69 per cent at $165.1 billion, according to government reports. Minister of State for Commerce and Industry Jitin Prasada said that FDI equity inflows in the manufacturing sector increased 69 per cent from $97.7 billion between 2004 and 2014 to $165.1 billion during the last decade of 2014-24.
Replying to a question in the Rajya Sabha, Prasada said that FDI inflows aggregated to $383.5 billion during the last five financial years from 2019-20 to 2023-24, on the back of production-linked incentive, or PLI, schemes.
It was a finding recently brought out by an HSBC survey that stated that the manufacturing sector in India remained on its solid growth path in July with strong domestic demand and new export orders driving expansion. The final HSBC India Manufacturing Purchasing Managers' Index, or PMI, inched down to 58.1 in July against 58.3 in June, compiled by S&P Global. It has remained above the 50 mark, which indicates expansion over contraction since July 2021—the longest period of expansion in more than a decade.
As per the latest data available with the government, 755 applications have been approved under PLI schemes across 14 major sectors and have achieved more than Rs 1.23 lakh crore investment as of March and roughly 8 lakh new jobs.
PLI schemes have the objective of enhancing the manufacturing and export capacities of the country for an allocation of Rs 1.97 lakh crore, or over USD 26 bln. These schemes are targets for bringing in investments in areas of strategic importance, advanced technologies, efficiency, and increasing economies of scale that will make Indian companies competitive globally.
It would thus directly benefit sectors related to the manufacture of mobiles and electronic components, pharmaceuticals, medical services, automobiles and auto parts, steel, telecom products, textiles, food products, etc.
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