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Electronics to chemicals: Govt identifies critical sectors to boost FDI
Shreya Nandi New Delhi
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The government has identified critical sectors, including electronics, chemicals, leather and footwear, and toys, where value chains can be strengthened to facilitate and drive foreign direct investment (FDI) into the country.
Invest India, the investment promotion and facilitating agency under the Department for Promotion of Industry and Internal Trade (DPIIT), has been actively identifying key value chains to focus on.
'Invest India has been systematically working on identifying which are the value chains we should be working on, identifying companies for those value chains and then approaching those companies for bringing in investments,' a senior government official said.
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Time of India
an hour ago
- Time of India
Government identifies key sectors to attract foreign investors
NEW DELHI: Amid signals of companies holding back on investment decisions due to the global uncertainty, govt and Invest India have identified Electronics System Design and Manufacturing, non-leather footwear, chemicals, medical devices, toys and EVs as sectors to court global investors for stepping up foreign direct investment (FDI) inflows. In recent months, net FDI inflows have been in focus as international investors are disinvesting in their existing ventures, largely through IPOs, while Indian companies have also stepped up global investments, resulting in outflows. During April-May, the latest period for which data is available, net FDI was unchanged at $3.9 billion, although gross inflows rose from $15.1 billion to $15.9 billion. In 2024-25, net inflows were estimated at $949 million as against $10 billion in the previous year. Govt is looking to increase gross inflows by focusing on facilitation. "We are focusing on our requirements by systematically identifying the value chains where companies can invest," a senior official said. While the new electronics components scheme has seen a lot of traction, as India seeks to build a resilient supply chain and reduce dependence on China, govt is also banking on a shift away from China as companies diversify their production ecosystem. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Free P2,000 GCash eGift UnionBank Credit Card Undo In sectors such mobile phones, the production linked incentive scheme has seen the likes of Foxconn invest heavily in India along with their vendor base. Besides, officials said, in segments such as air conditioners too, there was increased focus on manufacturing compressors, motors and copper tubes in India, driven by incentives. The PLI scheme had also helped pharma and medical devices production, the official said. "We are discussing how we can take this forward," the source added. While companies such as Vinfast have entered India to tap into the growing demand for electric vehicles, discussions around lowering import duty through the trade agreements has resulted in some other companies holding back on plans to invest in manufacturing facilities in India. This is despite a special scheme launched by govt that allows imports at subsidised rates for three years, based on a commitment to make in India subsequently. Chinese companies such as BYD were also keen to set up a plant in India but govt has imposed checks on these investments. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Mint
2 hours ago
- Mint
India plans coordinated FDI drive, eyes global investors in these key sectors
New Delhi: The Centre is working on a plan to create a more industry-friendly ecosystem for foreign direct investment (FDI), by identifying key sectors and reaching out to global companies for investments, according to two senior government officials aware of the matter. The plan, which will also draw on existing production-linked incentive (PLI) schemes and infrastructure development programs, involves close coordination between the Centre and states, the officials said on condition of anonymity. They added that the idea is to align states' efforts with national priorities, address local policy bottlenecks, and strengthen the country's overall manufacturing and supply chain ecosystem as the country attempts to boost annual FDI inflows to more than $100 billion over the next few years from $80-billion levels currently. So, what's the plan? As a first step, the Unionministry of commerce and industryis coordinating with Invest India, the country's top investment promotion and facilitation agency, to identify key value chains and sectors that require targeted intervention. 'We are mapping the sectors and value chains where India can play a larger role and then approaching global companies operating in those areas to bring in investment," the first official cited above said. 'We are working at both the state and central levels to provide all possible facilitation required by investors," the second official said. According to these officials, the Centre is focusing on sectors such as electronics system design and manufacturing (ESDM), chemicals, toys, and footwear—particularly non-leather footwear—where leading companies have shown strong interest in joining India's supply chain. In the toy sector especially, several global companies have begun discussions to set up manufacturing bases in India, drawn by government incentives and the expanding domestic market, the second person said, without naming the companies planning to invest in these sectors. The states in focus include Maharashtra, Tamil Nadu, Andhra Pradesh, Gujarat, Karnataka, Uttar Pradesh, Delhi, Madhya Pradesh, and Odisha, among others. Queries emailed to theministry of commerce and industry, whichis spearheading this initiative, remained unanswered till press time. Vivek Singhal, chief executive officer (CEO) of Bidso, a B2B manufacturer of outdoor toys, said that the influx of FDI can lead to a doubling of manufacturing units, adoption of advanced production technologies, and a shift from import dependence to domestic output, eventually making India a net exporter. 'India now manufactures 88% of the toys sold domestically and has a unique opportunity to become both a manufacturing powerhouse and a champion of its rich legacy in traditional toys," said Singhal. 'We are in touch with brands that lead design and innovation such as Buffalo Games and Chillafish to move their procurement to India." Here's more details The department for promotion of industry and internal trade (DPIIT), which comes under the Union commerce ministry, has tasked Invest India with identifying global investors, working with states to make necessary changes in the policy framework to provide a better investment ecosystem, and organising roadshows in different countries to woo investors. The DPIIT is coordinating with other line ministries such as ministry of electronics and information technology (MeitY), food processing, textiles, and heavy industries. To ease visas for investors, the DPIIT is working with the ministries of home affairs and external affairs. The Jan Vishwas Bill 2.0, which aims to decriminalise several Acts, has also been introduced to encourage investors by improving the overall ecosystem. The Bill is listed for presentation in the ongoing monsoon session and is likely to be tabled during the current session of Parliament, as per the officials cited above. Adding momentum to existing initiatives To be sure, the Centre is already offering financial support to attract investment and build more resilient supply chains within sectors–an example being the PLI scheme for electronic components administered by the MeitY. The second official cited above pointed out that apart from the procedural framework laid out under Press Note 3, which regulates FDI from countries sharing land borders with India, there are minimal regulatory hurdles for foreign money to come into the country. Between 2019 and 2024, the government undertook further liberalisation measures, including allowing 100% FDI under the automatic route in coal mining, contract manufacturing, and insurance intermediaries. In the 2025 Union Budget, it proposed raising the FDI limit for insurance companies from 74% to 100%, provided they invest their entire premium income within the country. India's FDI numbers India attracted foreign direct investment (FDI) worth $81.04 billion in FY25, marking a 14% jump from the previous year, data from the commerce ministry showed. The services sector emerged as the top recipient of FDI equity inflows, accounting for 19% of the total, with investments rising nearly 41% to $9.35 billion in FY25 from $6.64 billion a year earlier. This was followed by the computer software and hardware sector, which attracted 16% of inflows, and the trading sector, with an 8% share. India's cumulative FDI inflow over the last eleven years (2014-25) has reached $748.78 billion, a 143% rise over the preceding eleven-year period (2003-14), which saw $308.38 billion. The number of countries investing in India also rose to 112 in FY25, compared with 89 in FY14. FDI inflows into India peaked at $84.83 billion in the fiscal year 2021-22, according to data shared by minister of state for finance Pankaj Chaudhary in the Lok Sabha on 10 March. Thereafter, the numbers declined to $71.35 billion in FY23 and $71.27 billion in FY24, following uncertainty about a potential global recession, economic crises triggered by geopolitical conflicts and rising global protectionist measures.
Time of India
8 hours ago
- Time of India
Amid FDI slump, focus turns on chemical, leather and electronics
The government has identified chemicals, ESDM (electronics system design & manufacturing), leather and footwear as sectors in which it wants to attract more foreign direct investment (FDI). It's also working with states on a larger plan to encourage investment from overseas. The efforts come as FDI equity inflows dropped 24.5% to $9.34 billion in the March quarter from the year before. Net FDI inflows were $35 million in May, 98% lower from the year before and 99% lower than the $3.9 billion in April 2025. Explore courses from Top Institutes in Please select course: Select a Course Category Design Thinking Leadership Digital Marketing Data Science Project Management Public Policy MBA healthcare Others PGDM Product Management Operations Management Artificial Intelligence Healthcare Management Data Science Data Analytics Finance MCA Technology CXO others Degree Skills you'll gain: Duration: 22 Weeks IIM Indore CERT-IIMI DTAI Async India Starts on undefined Get Details "Invest India has identified some sectors and the department is also focusing on some," said an official. "There is a push to diversify supply chains and talks are happening even at the state level." by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Villas For Sale in Dubai Might Surprise You Villas in Dubai | Search Ads Get Info Undo The key sectors attracting the maximum inflows include services, computer software and hardware, telecommunications, trading, construction development, automobile, chemicals and pharmaceuticals. Live Events Certain toy companies, as per the official, are keen to shift a part of their supply chains to India. The Department for Promotion of Industry and Internal Trade (DPIIT) is discussing ways of attracting FDI with Andhra Pradesh and Karnataka, the official said. "UP, Odisha, MP and Maharashtra are picking up in FDI," the person added. The exercise is significant as India seeks to achieve an annual FDI of $100 billion from $70-80 billion now. Jan Vishwas Continuing with its efforts toward ease of doing business, the official said a cabinet note on the Jan Vishwas 2.0 legislation to decriminalise and deregulate certain laws, is in the final stages. The bill is scheduled to be introduced in the ongoing monsoon session of parliament. The Jan Vishwas (Amendment of Provisions) Bill 2025 seeks to promote ease of doing business and improve regulatory compliance and more than 100 provisions in various laws could be decriminalised to further reduce legal complexities and the compliance burden. "We have completed inter-ministerial consultations and the cabinet note is in its final stages," the official said. Under the Jan Vishwas (Amendment Of Provisions) Act 2023, around 183 provisions in 42 Acts related to 19 departments were decriminalised. Overall, more than 40,000 compliances across the country have been eliminated or simplified and there is a significant push to reduce the burden of criminalisation of many laws.
