Foreign direct investment in India’s manufacturing sector reached $165 billion, up 69% in the last 10 years

The country is becoming an increasingly important destination for foreign investment in the manufacturing sector. According to the government, foreign direct investment (FDI) inflows into the sector have increased by almost 69 percent over the past decade, reaching $165.1 billion.

Jitin Prasada, Minister of State for Commerce and Industry, said that foreign direct capital inflows into manufacturing sectors increased by 69 per cent to $165.1 billion in the last 10 fiscal years (2014-2024) from $97.7 billion in the previous 10 fiscal years (2004-14).

In response to a question in the Rajya Sabha, the Minister said that total foreign direct investment (FDI) inflow of USD 383.5 billion took place during the last five financial years (2019-20 to 2023-24) and its major source was production-linked incentive (PLI) schemes.

Manufacturing activity in India continued to grow at a strong pace in July, boosted by strong domestic demand and new export orders, according to the latest HSBC survey.

The final reading of S&P Global’s HSBC India Manufacturing PMI was 58.1 last month, similar to June’s 58.3.

Since July 2021, the index has remained above the 50-point barrier between growth and recession, marking the longest expansion phase in the past 11 years.

Latest government data shows that under PLI schemes, 755 applications were approved across 14 key sectors and investments stood at Rs 1.23 lakh crore till March, resulting in creation of around 8 lakh jobs.

It was announced that PLI schemes for 14 key sectors have been earmarked at Rs 1.97 lakh crore (over $26 billion) to boost the country’s manufacturing and export potential.

According to Prasady, the objective of PLI programmes is to attract investments in key sectors and cutting-edge technologies, create efficiencies and leverage economies of scale in the manufacturing sector and make Indian companies and manufacturers globally competitive.

Key sectors include: production of mobile devices and certain electronic components, medicines and pharmaceutical ingredients, production of medical services, production of cars and car components, production of steel, telecommunications products, textiles, food and others.