HIGHEST FDI INFLOW IN INDIA

ABSTRACT
This paper is made an attempt to analyze the trend of FDI flow into country. Sector wise and
country wise analyze has been made. FDI is an important driver of economic growth of the
country. India witnessed the significant growth in FDI reflect the impact of liberalization. In pre
liberalization period, very restrictive policy was used and more focused on import substitution.
Govt. put control on import in many ways such as imports were canalized, high tariffs were
imposed which led to high cost of imported goods etc. after liberalization, more focus on
outward oriented policy as well as reduce regulation and duties on import. . FDI inflows in to
India have risen from US$4029 in 2001 to US$73455 in 2020. Major FDI inflow in India went
from service sector followed by software and hardware and telecommunication. Service sector in
India has been growing rapidly during last two decades. Growth in this sector has been higher
than manufacturing and agriculture sector. After service sector, software and hardware and
telecommunication attract good FDI flow in India. India is the 9th largest recipient of FDI among
top 10 host countries in 2020. Singapore is top investing country in India with US$14.67 billion
followed by Mauritius accounting for US$ 8.24 billion .Among states, Maharashtra received
highest share of FDI followed by Karnataka and Delhi.

INTRODUCTION
A foreign direct investment (FDI) is an investment in the form of a controlling ownership in
a business in one country by an entity based in another country. It is thus distinguished from
a foreign portfolio investment by a notion of direct control. Broadly, foreign direct investment
includes "mergers and acquisitions, building new facilities, reinvesting profits earned from
overseas operations, and intra company loans". FDI is the sum of equity capital, long-term
capital, and short-term capital as shown in the balance of payments. FDI usually involves
participation in management, joint-venture, transfer of technology and expertise. Stock of FDI is
the net (i.e., outward FDI minus inward FDI) cumulative FDI for any given period. Direct
investment excludes investment through purchase of shares (if that purchase results in an
investor controlling less than 10% of the shares of the company).
Foreign direct investment in India is a major monetary source for economic development in
India. Foreign companies invest directly in fast growing private auspicious businesses to take
benefits of cheaper wages and changing business environment of India. Economic
liberalisation started in India in wake of the 1991 economic crisis and since then FDI has steadily
increased in India, which subsequently generated more than one crore (10 million) jobs.
On 17 April 2020, India changed its foreign direct investment (FDI) policy to protect Indian
companies from "opportunistic takeovers/acquisitions of Indian companies due to the
current COVID-19 pandemic", according to the Department for Promotion of Industry and
Internal Trade. While the new FDI policy does not restrict markets, the policy ensures that all
FDI will now be under scrutiny of the Ministry of Commerce and Industry.
Capital formation is an important determinant of economic growth. While domestic investments
add to the capital stock in an economy, foreign direct investment (FDI) plays a complementary
role in overall capital formation by filling gap between domestic saving and investment. Gross
fixed capital formation had declined during 2011-12 and 2016-17. The trend reversed in 2017-
18. The growth rate of gross fixed capital formation increased from 8.3% in 2016-17 to 9.3 % in
2017-18 and further rose to 10% in 2018-19. The rapid expansion of FDI by multinational
enterprises (MNCs) since the mid- eighties may be attributed to significant changes in
technologies, liberalization of trade and investment regimes, and deregulation and privatization
of markets in many countries like India. Fresh investment, as well as merger and acquisitions,
(M&A) play an important role in the cross- country movement of FDI. The World Investment
Report 2020 by the UN Conference on Trade and Development (UNCTAD) said that India was
the 9th largest recipient of FDI in 2019, with $51 billion of inflow during the year, an increase
from $42 billion of FDI received in 2018, when India ranked 12 among the top 20 host
economies in the world. In the "Development Asia" region, India was among top 5 host
economies for FDI. The report said that global FDI flows are forecast to decrease by up to 40%
in 2020, from their 2019 value of USD 1.54 trillon. According to Financial Times, in 2015 India
overtook China and United States as the top destination for the FDI. In first half of 2015 India
attracted investment of $31 billion compared to $28 billion and $27 billion of China and US
respectively. Data for 2019-2020 indicates that services sector attracted the highest FDI equity
inflow of US$7.85 billion, followed by computer software and hardware at US$7.67 billion,
telecommunications sector at US$4.44 billion, and trading at US$4.57 billion.

GLOBALISATION OF FDI IN INDIA

Indian economic policy reforms have played a vital role in the performance of economy since
1991. Pre-liberalization investment policy had under scored due to extensive government
intervention. Pre liberalization investment policy was restrictive in nature and needed to be
liberalized. In 1991, investment policy in India gradually liberalized increasing the receptiveness
of the economy to foreign investment flows. FDI up to 51 per cent allowed under automatic
route in 34 priority sectors. Government of India replace FERA, in1973 with Foreign Exchange
Management Act ( FEMA) 1999, that facilitate foreign trade and payment and promote foreign
exchange market. The government opened a lot of new sectors to FDI from 2000 to 2005 such as
FDI in defense production, insurance and print media were allowed up to 26 percent. E-
commerce, voice mail, electronic mail were allowed to 100 percent subject to 26 percent
disinvestment in 5 year. 100% FDI was permitted for Indian real estate sector in 2005, which had
led to a boon in investment and developmental activities in later year. In 2006, FDI was allowed
to 51% in single brand retail subject to prior approval. It was a vital decision and brought huge
transformation for the Indian economy and retail sector as well. In 2012, govt. increase FDI limit
to 100% in single brand retail via approval route from 51% and approved 51% FDI in multi
brand retail. In 2014, government launched the campaign like make in India, skill India and
further start up India in 2016 to boost the entire investment environment. GOI increased FDI
limit from 26% to 49% in insurance sector in 2014. FDI policy provisions have been
progressively liberalized across various sectors in recent year to make India an attractive
destination. These reforms contribute in attracting more investment flow in India. Total FDI into
India from 2014-15 to 2018-19 has been US$ 286 billion as compared to US$ 189 billion in the 5
year period prior to that ( 2009-10 to 2013-14). The world bank released its latest report ease of
doing business report (DBR,2020) on 24th October 2019, India has recorded a jump of 14
position against its rank of 77 in previous year to be placed now at 63rd rank among 190
countries assess by world bank. In 2019, govt. liberalized major FDI norms in coal mining and
related infrastructure, contract manufacturing, single brand retailing and digital media. GOI
allowed 100% FDI in contract manufacturing and coal mining and other related activities related
to its sale related infrastructure via automatic route and 26% FDI for digital media has been
approved. As per latest policy issued by DIPP, 100% FDI allowed in case of single brand retail
through automatic route. However, where FDI is more than 51%, at latest 30% of the value of
goods should be procured from India. This is viewed to promote domestic sector in India. In
2020, Government notified changes in FDI rules, which made prior approval of the govt.
mandatory for foreign investment from countries that share boarder with India, to prevent
opportunistic takeover of domestic firms amid COVID-19 pandemic under FEMA law.

THE SECTORS IN WHICH FDI IS ALLOWED IN INDIA

Many changes have been made to the Foreign Direct Investment (FDI) policy in the last few
years.  Further, FDI is also allowed through two different routes namely, Automatic and the
Government route. The erstwhile Foreign Investment Promotion Board (FIPB) has been phased
out recently. In the automatic route, foreign entities do not need the prior approval of the
government to invest. However, they have to inform the RBI about the amount of investment
within a stipulated time period. In the government route, any investment can be made only after
the prior approval of the government. Various other conditions as defined in the consolidated
FDI policy are applicable to various sectors. In specific sectors, the FDI is prohibited.

SECTOR WISE FDI LIMITS

Sector FDI Entry Route & Remarks
Limit
Agriculture & Animal Husbandry 100% Automatic
• Floriculture, Horticulture, Apiculture and Cultivation of
Vegetables &      Mushrooms under controlled conditions
• Development and Production of seeds and planting
material
• Animal Husbandry(including breeding of dogs),
Pisciculture, Aquaculture
• Services related to agro and allied sectors
Plantation Sector 100% Automatic
• Tea sector including tea plantations
• Coffee plantations
• Rubber plantations
• Cardamom plantations
• Palm oil tree plantations
• Olive oil tree plantations
Mining 100% Automatic
Mining and Exploration of metal and non-metal ores
including diamond, gold, silver and precious ores but
excluding titanium bearing minerals and its ores
Mining (Coal & Lignite) 100% Automatic
Mining 100% Government
Mining and mineral separation of titanium bearing
minerals and ores, its value addition and integrated
activities
Petroleum & Natural Gas 100% Automatic
Exploration activities of oil and natural gas fields,
infrastructure related to marketing of petroleum products
and natural gas, marketing of natural gas and petroleum
products etc
Petroleum & Natural Gas 49% Automatic
Petroleum refining by the Public Sector Undertakings
(PSU), without any disinvestment or dilution of domestic
equity in the existing PSUs.
Defence Manufacturing 100% Automatic up to 49%
Above 49% under
Government route in
cases resulting in access to
modern technology in the
country
Broadcasting 100% Automatic
• Teleports(setting up of up-linking HUBs/Teleports)
• Direct to Home (DTH)
• Cable Networks (Multi System operators (MSOs)
operating at National or State or District level and
undertaking upgradation of networks towards
digitalization and addressability
• Mobile TV
• Head end-in-the Sky Broadcasting Service(HITS)
Broadcasting 100% Automatic
Cable Networks (Other MSOs not undertaking up
gradation of networks towards digitalization and
addressability and Local Cable Operators (LCOs))
Broadcasting Content Services 49% Government
• Terrestrial Broadcasting FM(FM Radio)
• Up-linking of ‘News & Current Affairs’ TV Channels
Up-linking of Non-‘News & Current Affairs’ TV 100% Automatic
Channels/ Down-linking of TV Channels
Print Media 26% Government
• Publishing of newspaper and periodicals dealing with
news and current affairs
• Publication of Indian editions of foreign magazines
dealing with news and current affairs
Publishing/printing of scientific and technical 100% Government
magazines/specialty journals/ periodicals, subject to
compliance with the legal framework as applicable and
guidelines issued in this regard from time to time by
Ministry of Information and Broadcasting.
Publication of facsimile edition of foreign newspapers 100% Government
Civil Aviation – Airports 100% Automatic
Green Field Projects & Existing Projects
Civil Aviation – Air Transport Services 100% Automatic up to 49%
• Scheduled Air Transport Service/ Domestic Scheduled Above 49% under
Passenger Airline Government route
• Regional Air Transport Service 100% Automatic for
(Foreign Airlines are barred from Investing in Air India) NRIs

Civil Aviation 100% Automatic

• Non-Scheduled Air Transport Service
• Helicopter services/seaplane services requiring DGCA
approval
• Ground Handling Services subject to sectoral regulations
and security clearance
• Maintenance and Repair organizations; flying training
institutes; and technical training institutions
Construction Development: Townships, Housing, 100% Automatic
Built-up Infrastructure
Industrial Parks (new & existing) 100% Automatic
Satellites- establishment and operation, subject to the 100% Government
sectoral guidelines of Department of Space/ISRO
Private Security Agencies 74% Automatic up to 49%
Above 49% & up to 74%
under Government route
Telecom Services 100% Automatic up to 49%
Above 49% under
Government route
Cash & Carry Wholesale Trading 100% Automatic
E-commerce activities (e-commerce entities would 100% Automatic
engage only in Business to Business (B2B) e-commerce
and not in Business to Consumer (B2C) e-commerce.)
Single Brand retail trading 100% Automatic up to 49%
Local sourcing norms will be relaxed up to three years and Above 49% under
a relaxed sourcing regime for another five years for Government route
entities undertaking Single Brand Retail Trading of
products having ‘state-of-art’ and ‘cutting edge’
technology.
Multi Brand Retail Trading 51% Government
Duty Free Shops 100% Automatic
Railway Infrastructure 100% Automatic
Construction, operation and maintenance of the following
• Suburban corridor projects through PPP
• High speed train projects
• Dedicated freight lines
• Rolling stock including train sets, and
locomotives/coaches manufacturing and maintenance
facilities
• Railway Electrification
• Signaling systems
• Freight terminals
• Passenger terminals
• Infrastructure in industrial park pertaining to railway
line/sidings including electrified railway lines and
connectivities to main railway line
• Mass Rapid Transport Systems.
Asset Reconstruction Companies 100% Automatic
Banking- Private Sector 74% Automatic up to 49%
Above 49% & up to 74%
under Government route
Banking- Public Sector 20% Government
Credit Information Companies (CIC) 100% Automatic
Infrastructure Company in the Securities Market 49% Automatic
Insurance 49% Automatic
• Insurance Company
• Insurance Brokers
• Third Party Administrators
• Surveyors and Loss Assessors
• Other Insurance Intermediaries
Pension Sector 49% Automatic
Power Exchanges 49% Automatic
White Label ATM Operations 100% Automatic
Financial services activities regulated by RBI, SEBI, 100% Automatic
IRDA or any other regulator
Pharmaceuticals(Green Field) 100% Automatic
Pharmaceuticals(Brown Field) 100% Automatic up to 74%
Above 74% under
Government route
Food products manufactured or produced in India 100% Government
Trading, including through e-commerce, in respect of food
products manufactured or produced in India.

Prohibited Sectors 
FDI is prohibited in the following sectors
 Lottery Business including Government/private lottery, online lotteries, etc.
 Gambling and Betting including casinos etc.
 Chit funds
 Nidhi company
 Trading in Transferable Development Rights (TDRs)
 Real Estate Business or Construction of Farm Houses (Real estate business does not
include development of townships, construction of residential /commercial premises,
roads or bridges )
 Manufacturing of cigars, cheroots, cigarillos and cigarettes, of tobacco or of
tobacco substitutes
 Activities/sectors not open to private sector investment e.g. Atomic Energy and Railway
operations (other than permitted activities).

HIGHEST FDI INFLOW IN INDIA:

The Sector wise Analysis of FDI Inflow in India reveals that maximum FDI has taken place in
the service sector including information technology, transportation sector, manufacturing sector
and many others.

Top three sectors attracting highest FDI inflow in India are

 IT and BPM sector

 Transportation sector
 Manufacturing sector
FDI EQUITY INFLOW IN IT & BPM SECTOR:
FDI INFLOW IN INDIA We have been seeing FDI inflow constantly increasing in India in the
past few years. In the year 2020-21, FDI inflow had increased by more than USD 10000 million
from last year. FDI in 202021 was USD 52,545 million. Sector with highest FDI inflow in 2020-
21: Sector to attract the highest inflow in 2020-21 is the IT & BPM sector. The FDI inflow in
this sector was around 44% of the total FDI inflow in the year 2020-21. This sector has attracted
USD 23050 million which is about 5 times of the last year FDI inflow(USD 4104 million) in the
same sector. It has been constantly increasing in the last few years but this was the highest
increase. Under the sector `IT & BPM’, the major recipient states are Gujarat (78%), Karnataka
(9%) and Delhi (5%) in F.Y. 2020-21.

736 247 934 2,154

YEAR FDI INFLOW

2011-12 736
2012-13 247
2013-14 934
2014-15 2,154

2015-16 4,319
2016-17 1,937
2017-18 3,173
2018-19 3,453
2019-20 4,104
2020-21 23,050
 2020-21

2019-20

2018-19

2017-18

2016-17

2015-16

2014-15

2013-14

2012-13

0 5000 10000 15000 20000 25000

FACTORS INFLUENCING HIGHEST INFLOW IN IT AND BPM

SECTOR:

Faster Digitalization:
In today’s constantly changing business environment new opportunities and challenges arise
every day – often driven through the all present digitalization. Fingar, a well-known process
management expert, introduces “extreme competition” as a result of various market forces, like
knowledge as business capital, the internet, “jumbo transportation”, billions of new “capitalists”
as well as the new dimension of information technology and, of course, digitalization. To master
the resulting challenges and benefit from the opportunities, systematic and well managed
innovation has become a core focus area for high performing organizations. To ensure long-term
survival, an enterprise must make innovation part of its day-to-day business. This is often the
only way to achieve desired revenue and goals.

Artificial Intelligence is Changing the Information Technology Sector:

Artificial Intelligence has had a positive impact on the way the IT sector works; in other words,
there is no denying the fact that it has revolutionized the very essence of the space. Since the IT
sector is all about computers, software, and other data transmissions, there is a relatively
important role Artificial Intelligence can play in this domain. Artificial Intelligence is a branch of
computer science that aims at turning computers into intelligent machines, which would
otherwise not be possible without a human brain. Through the use of algorithms and computer-
based training, Artificial Intelligence and Machine Learning can effectively be used to create
expert systems that will exhibit intelligent behavior, provide solutions to complicated problems,
and further help to develop stimulations equivalent to human intelligence within machines.
Artificial Intelligence uses a series of algorithms, which can be applied directly to aid
programmers when it comes to writing better code and overcoming software bugs. Artificial
Intelligence has been developed to provide suggestions for coding purposes, which increase
efficiency, enhance productivity, and provide clean, bug-free code for developers. By judging the
structure of the code, AI can provide useful suggestions, which can improve the productivity and
help to cut downtime during the production stage. The benefit of automation is that almost every
piece of work can be done without human intervention. Through the use of deep learning
applications, organizations can go a long way in automating backend processes, which help
enable cost savings and reduce human intervention. AI enabled methods improve over time as
the algorithms adjust to enhance productivity and learn from mistakes.

Digital Excellence: The New Normal

India is emerging as the hub for “Digital Skills”. The IT industry in India is the largest employer
within the private sector. In FY20, the IT industry in India employed over 4 million personnel
directly. Further, every job in the technology sector had a multiplier effect leading to the creation
of 2.5 indirect jobs in the adjacent sectors. India is transforming into a digital economy with over
750 million internet subscribers; only second to China. IT industry can play a key role in raising
services exports to $1 trillion in 2021. Amid the lockdown, the IT & BPM sector was one of the
quickest to adapt to remote work culture. During a global pandemic, in the Indian IT services
industry, the hiring intent came with the benefits of work from home for more than 2 million IT
professionals working remotely. The country's cost competitiveness in providing IT services,
which is approximately 3-4 times more cost-effective than the US, continues to be its unique
selling proposition in the global sourcing market. The National Optical Fiber Network (NOFN)
aims to connect all 250,000 Gram Panchayats (village council) in the country with high-speed
broadband. Indian data center industry’s capacity to double by 2023. Indian software product
industry is expected to reach $100 billion by 2025. Up to 100% FDI is allowed in Data
processing, Software development and Computer consultancy services; Software supply
services; Business and management consultancy services, Market research services, Technical
testing and Analysis services, under automatic route.

FDI in computer software, hardware jumps threefold to $26.14 billion in

2020-21: Foreign direct investment (FDI) in computer software and hardware jumped over
threefold to $26.14 billion during 2020-21 on account of significant growth in the country's
technology space, according to data from the Department for Promotion of Industry and Internal
Trade. The sector received $7.67 billion FDI in 2019-20 and $6.41 billion in 2018-19, the data
showed. The computer software and hardware sector accounted for about 43 per cent in the total
$59.63 billion foreign inflows that India attracted in 2020-21. The technology space in India is
growing significantly on the back of the rapid end-to-end digitization of businesses, Deloitte
India Partner Rajat Wahi said. "This has especially accelerated during the lockdowns over the
last year that has forced businesses to automate processes across the value chain - and this is
likely to further accelerate this year and in the next 2-3 years."This technology enablement is
attracting overseas investors to India, where hardware, software and SaaS (software-as-a-service)
are seeing a big push in India's FDI," he said. Most technology practices are getting great traction
today, especially in segments like e-commerce, and a lot of the FDI is likely to be used to
support technology enablement across sectors and across the value chain, Wahi added.
Increasing digitalization As the use of video- and audio-conferencing tools increases
significantly, organizations will ramp up their technology infrastructure to account for the surge.
This will lead to increased investment in bandwidth expansion, network equipment, and software
that leverages cloud services.

GOVERNMENT POLICIES:
 India welcomes investors in the Electronics and IT sector. The Government of India is
striving to bring greater transparency in policies and procedures to provide an investor
friendly platform.
 A foreign company can start operations in India by registration of its company under the
Indian Companies Act 1956. Foreign equity in such Indian companies can be up to 100%.
At the time of registration it is necessary to have project details, local partner (if any),
structure of the company, its management structure and shareholding pattern
 A joint venture entails the advantages of established contracts, financial support and
distribution-marketing network of the Indian partner. Approval of foreign investments is
through either automatic route or Government approval.
 Foreign technology induction is encouraged both through FDI and through foreign
technology collaboration agreement. Foreign Direct Investment and Foreign technology
collaboration agreements can be approved either through the automatic route under
powers delegated to the Reserve Bank of India (RBI) or otherwise by the Government.
This sector comes under the Category 1 Sectors in which FDI is permitted up to 100%
under automatic route.

FDI EQUITY INFLOW IN MANUFACTURING SECTOR :

Manufacturing has emerged as one of the high growth sectors in India. Prime Minister of India,
Mr Narendra Modi, launched the ‘Make in India’ program to place India on the world map as a
manufacturing hub and give global recognition to the Indian economy. Government aims to
create 100 million new jobs in the sector by 2022.
FDI EQUITY INFLOW IN CHART

YEAR FDI EQUITY INFLOW

2011-12 9,337
2012-13 6,528
2013-14 6,381
2014-15 9,613
2015-16 8,439
2016-17 11,972

2017-18 7,066

2018-19 7,919

2019-20 8,153

2020-21 6,739

2020-2021

2019-2020

2018-19

2017-18

2016-17

2015-16

2014-15

2013-14

2012-13

2011-12
0 2,000 4,000 6,000 8,000 10,000 12,000 14,000

FACTORS INFLUENCING THIRD HIGHEST INFLOW IN

MANUFACTURING SECTOR:
1. Market Size
India’s gross domestic product (GDP) at current prices stood at Rs. 51.23 lakh crore (US$ 694.93
billion) in the first quarter of FY22, as per the provisional estimates of gross domestic product
for the first quarter of 2021-22. The manufacturing GVA at current prices was estimated at US$
97.41 billion in the first quarter of FY22.
India has potential to become a global manufacturing hub and by 2030, it can add more than US$
500 billion annually to the global economy.
The IHS Markit India Manufacturing Purchasing Managers' Index (PMI) stood at 55.9 in
October 2021.
As per the survey conducted by the Federation of Indian Chambers of Commerce and Industry
(FICCI), capacity utilisation in India’s manufacturing sector stood at 72.0% in the second quarter
of FY22, indicating significant recovery in the sector.
The overall index stood at 134.0, as of July 2021. This rise in the index was supported by growth
in production of natural gas, steel, cement, fertilisers, coal, refinery products and electricity.
In July 2021, natural gas output increased by 18.9%, coal (18.7%), petroleum refinery production
(6.7%), fertilisers (0.5%), steel (9.3%), cement (21.8%) and electricity (9.0%).
In September 2021, the manufacturing component of IIP stood at 129.9
Merchandise exports from select industries (including engineering, petroleum products, gems &
jewellery, drugs & pharmaceuticals and chemicals) stood at US$ 151.96 billion between April
2021 and October 2021.
The overall index stood at 126.7 as of September 2021. This rise was supported by growth in the
production coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity.

2. Investments
According to Department for Promotion of Industry and Internal Trade (DPIIT), cumulative FDI
inflows in the manufacturing subsectors amounted to US$ 100.35 billion between April 2000 and
June 2021.
In May 2020, the Government of India increased FDI in defence manufacturing under the
automatic route from 49% to 74%.
India has become one of the most attractive destinations for investment in the manufacturing
sector. Some of the major investments and developments in this sector in the recent past are:

 In October 2021, information technology major Zoho, announced that it will invest
Rs. 50–100 crore (US$ 6.7–13.4 million) and form a new company, that will focus on
research and development (R&D) in the manufacturing sector.
 In August 2021, Wistron Corp. collaborated with India's Optiemus Electronics to
manufacture products such as laptops and smartphones, giving a major boost to the
‘Make in India’ initiative and electronics manufacturing in the country.
 First Solar, an American solar panel company, plans to invest Rs. 4,800 crore (US$
645.7 million) in its new 3.3-gigawatt (GW) manufacturing facility in Tamil Nadu.
 In FY21, India received a total foreign direct investment (FDI) inflow of US$ 81.72
billion, a 10% increase YoY.
 On February 16, 2021, Amazon India announced to start manufacturing electronic
products in India, starting first with Amazon Fire TV stick manufacturing. The
company plans to start manufacturing with contract manufacturer Cloud Network
Technology, a subsidiary of Foxconn in Chennai by end-2021.
 In April 2021, Samsung started manufacturing mobile display panels at its Noida plant
and plans to ramp up manufacturing IT display panels soon.
  Samsung Display Noida, which has invested Rs. 4,825 crore (US$ 650.42 million) to
move its mobile and IT display manufacturing plant from China to Uttar Pradesh, has
received special incentives from the state government.
 In April 2021, Bharti Enterprises Ltd. and Dixon Technologies (India) Ltd., formed a
joint venture to take advantage of the government's PLI scheme for the manufacturing
of telecom and networking products.
 In April 2021, Godrej Appliances launched a range of Made-in-India air conditioners
(AC). The company plans to invest Rs. 100 crore (US$ 13.48 million) in its
manufacturing units (located in Shirwal and Mohali) to increase its AC production
capacity to 8 lakh units by 2025.
 In September 2021, outputs increased for natural gas by 27.5%, coal 8.1%, petroleum
refinery production (6.0%), steel (3.0%), cement (10.8%), electricity (0.3%) and
fertilizers (0.02%); However, output for crude oil declined by 1.7%.

GOVERNMENT INITIATIVES
Some of these initiatives are as follows:
 On November 19, 2021, Prime Minister, Mr. Narendra Modi, laid the foundation stone
for the Uttar Pradesh Defense Industrial Corridor project worth Rs. 400 crore (US$
53.73 million) in Jhansi.
 In November 2021, the Experts' Advisory Committee (EAC) of the Department for
Promotion of Industry and Internal Trade approved Rs. 3 crore (US$ 403,293.54) for
the Atal Incubation Centre (AIC), Pondicherry Engineering College Foundation
(PECF), under the Start-up India Seed Fund scheme.
 In September 2021, Prime Minister Mr. Narendra Modi approved the production-
linked incentive (PLI) scheme in the textiles sector—for man-made fibre (MMF)
apparel, MMF fabrics and 10 segments/products of technical textiles—at an estimated
outlay of Rs. 10,683 crore (US$ 1.45 billion).
 India outlines a plan in August 2021 to reach its goal of US$ 1 trillion in
manufactured goods exports.
 In July 2021, the government launched six technology innovation platforms to
develop technologies and thereby, boost the manufacturing sector in India to compete
globally.
 To propagate Make in India, in July 2021, the Defense Ministry issued a tender of Rs.
50,000 crore (US$ 6.7 billion) for building six conventional submarines under Project-
75 India.
 In July 2021, the Ministry of Commerce and Industry announced that 104 start-ups
from sectors, including food-tech, green energy, defence, education-tech, and health-
tech, have joined ‘Start-up India Showcase’, an online discovery platform for the
country's most promising start-ups that provides various social and digital connect
opportunities.
  In May 2021, the government approved a PLI scheme worth Rs. 18,000 crore (US$
2.47 billion) for production of advanced chemical cell (ACC) batteries; this is
expected to attract investments worth Rs. 45,000 crore (US$ 6.18 billion) in the
country, and further boost capacity in core component technology and make India a
clean energy global hub.
 In India, the market for grain-oriented electrical steel sheet manufacturing is
witnessing high demand from power transformer producers, due to the rising demand
for electric power and increasing adoption of renewable energy in the country.
 In line with this, in May 2021, JFE Steel Corporation in collaboration with JSW Steel
Limited (JSW) signed a MoU to evaluate a study to establish a grain-oriented
electrical steel sheet manufacturing & sales joint-venture company in India.
 To facilitate manufacturing and investment in sectors such as ICT and telecom, in
May 2021, TEMA (Telecom Equipment Manufacturers Association of India) signed a
collaboration deal with ICCC (Indo-Canada Chamber of Commerce) to promote
‘Make in India’ and ‘Self-reliant India’ initiatives.
 India's display panel market is estimated to grow from ~US$ 7 billion in 2021 to US$
15 billion in 2025.
 The Mega Investment Textiles Parks (MITRA) scheme to build world-class
infrastructure will enable global industry champions to be created, benefiting from
economies of scale and agglomeration. Seven Textile Parks will be established over
three years.
 The government proposed to make significant investments in the construction of
modern fishing harbours and fish landing centres, covering five major fishing
harbours in Kochi, Chennai, Visakhapatnam, Paradip, and Petuaghat, along with a
multipurpose Seaweed Park in Tamil Nadu. These initiatives are expected to improve
exports from the textiles and marine sectors.
 The 'Operation Green' scheme of the Ministry of the Food Processing Industry, which
was limited to onions, potatoes and tomatoes, has been expanded to 22 perishable
products to encourage exports from the agricultural sector. This will facilitate
infrastructure projects for horticulture products.
 The Union Budget 2021-22 allocated funds of Rs. 1,000 crore (US$ 137.16 million)
for the welfare of tea workers, especially women and their children. About 10.75 lakh
tea workers will benefit from this, including 6.23 lakh women workers involved in the
large tea estates of Assam and West Bengal.

CONCLUSION:

India is an attractive hub for foreign investments in the manufacturing sector. Several mobile
phone, luxury and automobile brands, among others, have set up or are looking to establish their
manufacturing bases in the country.
The manufacturing sector of India has the potential to reach US$ 1 trillion by 2025. The
implementation of the Goods and Services Tax (GST) will make India a common market with a
GDP of US$ 2.5 trillion along with a population of 1.32 billion people, which will be a big draw
for investors. The Indian Cellular and Electronics Association (ICEA) predicts that India has the
potential to scale up its cumulative laptop and tablet manufacturing capacity to US$ 100 billion
by 2025 through policy interventions.
With impetus on developing industrial corridors and smart cities, the Government aims to ensure
holistic development of the nation. The corridors would further assist in integrating, monitoring
and developing a conducive environment for the industrial development and will promote
advance practices in manufacturing.