With proper government support, more MNC investment, and geopolitical tailwinds in India’s favour, manufacturing is once again on the agenda, according to Julie Teigland, managing partner, EY (Europe, the Middle East, India, and Africa area).
“For many years, professional services were the mainstay of the Indian economy. I can see the manufacturing component emerging, since India has all of the ingredients: the proper talent, a reform-minded administration, and cutting-edge technology. This is a strong foundation. India has a big chance to win more areas of the value chain in the midst of geopolitical turmoil “she stated
Despite being beset by challenges and hampered by the pandemic, the Narendra Modi government has pursued a multi-pronged strategy to make Indian manufacturing competitive, including the production linked incentive (PLI) scheme, a favourable tax regime, low real interest rates, and a reform agenda aimed at easing business restrictions; and investors all across the world are taking note. Between April and November 2021-22, $54.1 billion in FDI was channelled into the country. According to EY’s FDI attractiveness research, India is the fifth most attractive market after the United States, the United Kingdom, China, and Germany.
“With so many private equity and venture capital groups looking to invest more in India, the attraction of India as an FDI destination is really increasing,” Teigland said. “There has been a tremendous focus on the appropriate level of reforms to promote a business community with sound economic foundations.” In 2021, 63 Indian companies raised a total of Rs. 1,18,704 crore through IPOs, while Indian startups raised $42 billion.