India Seeks More Manufacturing

Recently, we penned a note on how the Mexican economy is poised to benefit from shifting trade winds as global corporations reevaluate the risks of relying on Chinese workshops. But the Latin American heavyweight isn’t the only destination for investment. India, the world’s fifth largest and fastest growing major economy, aspires to be a viable contender for relocated global manufacturing and sourcing.

COVID-led supply chain bottlenecks, war disruptions and export restrictions have led firms to diversify suppliers and manufacturing locations. India’s policymakers are acting on this unprecedented opportunity by moving to attract new manufacturing business.

India’s recent business-friendly efforts include:

· The "Make in India" campaign, which aims to increase the share of manufacturing in the country's gross domestic product (GDP) and promote the growth of domestic industries.

· Establishing several special economic zones, which offer tax incentives, easier laws and expanded infrastructure.

· Slashing the corporate income tax rate from 30% to 22%.

· A $26 billion production-linked incentive plan that invites foreign investment in 14 manufacturing sectors and promotes partnerships with local manufacturers.