S&P Global Highlights India's Manufacturing Sector as a Growing Magnet for Global Investors

India has taken great strides to enhance its competitiveness and make its manufacturing base more attractive to global investors, a report by S&P Global published on Monday said.

While manufacturing accounts for a relatively small 17.2 percent of the country's real gross domestic product (GDP), the government has brought in targeted policy interventions aimed at augmenting domestic manufacturing capacity and making India even stronger in global supply chains.

The report points out that apart from short-term impacts, India can benefit from increasing trend of global trade protectionism that may spur attempts to diversify supply chains.

As the global trade landscape and cooperative frameworks evolve, India is well-positioned to seize emerging opportunities. Over the past 30 years, the country has expanded notably in size, scale, and international influence, and it is projected to become the world’s third-largest economy by the fiscal year 2030-31.

"Against changing trade dynamics and tariff pressures, India can use this momentum to drive manufacturing growth and integrate deeper into international supply chains," said the report India Forward: Transformative Perspectives.

India also has alternative energy as a top priority in order to create a cleaner and more independent transportation future.

One of the major components of this plan is the use of biofuels, which bring a triple benefit: meeting the energy security requirements of the country, curbing greenhouse gas (GHG) emissions, and generating new revenue streams for the agricultural industry, the report clarified.

In addition, India is seeking to integrate energy security with revenue security. Recent regulatory changes provide new opportunities for increasing crude oil exploration and development, assisting the country in moving towards increased energy self-reliance.

Although India's moderate dependence on foreign trade to a certain extent protects it from the worst effects of global changes in trade and tariff policies, the report observes that the country remains open to the effects of increased trade protectionism.