India is making significant strides in enhancing the appeal of its manufacturing sector to global investors, according to a new study by S&P Global India Research. The report, titled “India Forward: Transformative Perspectives,” highlights that global shifts in trade policy could work in India’s favour over the long term.“As economies adapt to evolving trade dynamics and tariff challenges, India can capitalise on this momentum for accelerated manufacturing growth and greater global supply-chain integration,” the study stated as reported news agency PTI.It points to a strategic global shift toward local sourcing, closer proximity to end-markets, and stronger regional integration as key trends that could drive additional investment into India’s manufacturing sector. These changes are expected to support the country’s technological advancement, boost competitiveness, and generate more high-quality manufacturing jobs.“Beyond the near-term, changes in global trade policy would catalyse supply-chain diversification, to the benefit of India,” the report added.The study noted that India has made “notable progress” in becoming more competitive and attractive to global manufacturing investors. It also emphasized that India remains the fastest-growing large economy, despite an expected slowdown in real GDP growth in fiscal 2024–25.With manufacturing currently accounting for 17.2% of India’s real GDP, the government has taken steps to increase domestic manufacturing capacity and strengthen its global supply chain presence through targeted policy initiatives.S&P also highlighted that India’s moderate reliance on external trade helps cushion the economy from the impact of global trade disruptions, although it is not fully immune to the effects of rising protectionism.“High-frequency HSBC Purchasing Managers’ Index (PMI) data … highlights the domestic manufacturing sector’s resilience to recent global headwinds compared with other major economies,” the report noted.Overall, S&P Global believes that ongoing reforms and global trade shifts present India with a strong opportunity to expand its role in global manufacturing.
