The inflow of FDI to the domestic production sector will increase: Ministry of Finance

New Delhi: India’s domestic manufacturing sector will receive stronger external support in the coming months as investment in the sector increases.

An increasing number of organizations in the U.S. and Europe are focusing on reindustrialization, according to the Ministry of Finance’s monthly economic review. The primary goal of these organizations is to increase supply chain resilience, which can bring significant benefits to Indian manufacturing companies under the China Plus One strategy.

The Ministry of Finance’s monthly review shows that the approach of Western economies is to diversify supply chains to reduce dependence on China by including other countries, with India being a prime candidate for such diversification.

Slightly better economic activity in India and consumer sentiment in Europe and a stable US economy resulted in an increase in Indian exports in April. According to data from the Ministry of Commerce, India’s exports, including goods and services, increased from $60.40 billion to $64.56 billion (y/y) in April.

The monthly review also highlighted that both the industrial and services sectors of the Indian economy are performing well, driven by solid domestic demand and supported by tentative external demand. This positive trend is expected to continue as global economic conditions improve.

EXIM Bank of India forecasts that merchandise exports will achieve double-digit growth in the first quarter of FY25, further signaling good prospects for the Indian manufacturing sector. This optimistic outlook is fueled by increased investment and strategic shifts in global supply chains to India’s advantage.

As global economies move towards stability and growth, India’s manufacturing sector can benefit from these developments by leveraging both domestic strengths and increased external support

According to the commerce ministry, India recorded record exports of $778 billion in FY23-24.

The Indian smartphone market saw 34 million smartphones shipped in the first quarter of 2024. It also grew 11.5% year-over-year, marking the third consecutive quarter of shipment growth, according to International Data Corporation’s Worldwide Quarterly Mobile Phone Tracking Device report.

India’s defense exports also touched a record Rs 21,083 crore in fiscal 2023-24, up 32.5% from the last fiscal when the figure was Rs 15,920 crore.

According to parliamentary data, from October 2019 to December 2023, total foreign investment in the manufacturing sector, reported by countries through the inflow of equity capital, amounted to $20.8 billion. The five states that saw the most investment were Maharashtra (29.6%), Karnataka (22.6%), Gujarat (16.3%), Delhi (13.5%) and Tamil Nadu (4%). .7 percent). (IANS)

Read also: “The United States benefited from a sharp decline in FDI share to China” (sentinelassam.com)