India's manufacturing sector more attractive to global investors: S&P study
S&P study said India has made "notable progress" in enhancing its competitiveness and making its manufacturing sector "more attractive to global investors".
India has made progress in making its manufacturing sector more attractive to global investors, and ongoing changes in international trade policy would benefit India in the long run, a S&P Global study said on Monday.
S&P Global India Research Chapter's study, titled 'India Forward: Transformative Perspectives', said that 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.
A strategic shift towards local sourcing, proximity to end-markets, and enhanced regional integration should attract additional investment to the sector, accelerating India’s technological advancement and manufacturing competitiveness and creating additional high-quality manufacturing jobs, it said.
"Beyond the near-term, changes in global trade policy would catalyse supply-chain diversification, to the benefit of India," it added.
The study said India has made "notable progress" in enhancing its competitiveness and making its manufacturing sector "more attractive to global investors".
India remains the world's fastest-growing large economy despite a slowdown in real GDP growth in fiscal 2024-25.
The S&P Global study said India has moderate dependence on external trade for growth, which cushions it somewhat from ongoing shifts in global trade and tariff policies, though it is not immune to the rising trade protectionism.
While manufacturing value added accounts for a modest 17.2 per cent 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 ... highlights the domestic manufacturing sector's resilience to recent global headwinds compared with other major economies," the study noted.
