India's Manufacturing Attracts Global Investors: S&P

• India draws global manufacturing investment amid trade shifts.
• Manufacturing GDP share dips; electronics see growth.
• India set to be 3rd-largest economy by FY31.

Research firm S&P Global claims that India's manufacturing sector is garnering attention from global investors, thanks to changing trade dynamics and shifting global supply chains.

"India has made notable progress in enhancing its competitiveness and making its manufacturing sector more attractive to global investors. 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", said S&P Global Team.

India is favorably positioned to benefit from new supply-chain diversification opportunities, especially since global companies are looking elsewhere other than China, however, India has only dipped its toes into the "China Plus One" strategy.

The S&P Global report points out that the manufacturing sector decreased its share of India GDP at constant prices from 16.8% in FY18 to 15.7% in FY25, despite advancements in high-growth sectors, such as electronics and smartphones. Problems still exist, including limited local value addition and stagnation of labour-intensive sectors.

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In the report "India Forward: Transformative Perspectives", S&P Global emphasized the robustness of the economy. While GDP growth was established at 6.5% in FY25 and 6.3%-6.5% in FY26 (going from 9.2% in FY24), it still retains fast growth of the large economies.

Longer term, shifting global trade policies are likely to continue to work in India's favor in its ascent as a manufacturing powerhouse, with the S&P Global Strategic Opportunity Index pointing to India's increasing competitiveness. In fact, it is projected to become the 3rd largest economy in FY31.

Martina L Cheung President & CEO, S&P Global added, "India is demonstrating strong resilience as it confronts unpredictable global market movement and geopolitical risk. As a leader on the global stage, it is a country worthy of everyone’s attention."