Indian Economy News

India's manufacturing sector more attractive to global investors: S&P Global

India has made significant progress in enhancing the attractiveness of its manufacturing sector to global investors, according to a study by S&P Global titled "India Forward: Transformative Perspectives." The study highlights that as economies adapt to evolving trade dynamics and tariff challenges, India can capitalise on this momentum for accelerated manufacturing growth and greater integration into global supply chains. A strategic shift towards local sourcing, proximity to end markets, and enhanced regional integration is expected to attract additional investment, accelerating India's technological advancement and manufacturing competitiveness and creating high-quality jobs. The study also notes that changes in global trade policy will catalyse supply-chain diversification, benefiting India in the long term. India has made "notable progress" in enhancing its competitiveness, making its manufacturing sector more appealing to global investors.
India remains the world's fastest-growing large economy despite a slowdown in real GDP growth in FY25. The country has a moderate dependence on external trade for growth, which provides some cushion against ongoing shifts in global trade and tariff policies. However, it is not immune to rising trade protectionism. The added manufacturing value accounts for 18.2% of the country's real gross domestic product (GDP). The government has implemented targeted policy interventions to build domestic manufacturing capacity and strengthen India's role in global supply chains. High-frequency HSBC Purchasing Managers' Index (PMI) data underscores the domestic manufacturing sector's resilience to recent global headwinds compared with other major economies.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.