Blog: India’s manufacturing excellence and related opportunities
The Indian Government’s flagship programme, “Make in India” intends to make manufacturing a cornerstone of the growing Indian economy this century. This goal of manufacturing excellence is fast becoming a reality because of attention given to fiscal benefits, world class infrastructure, and FDI friendly tax structure, welcoming global manufacturers to India.
These constructive reforms have resulted in India becoming the second most attractive manufacturing hub in the world in 2021, according to Cushman & Wakefield’s 2021 World Manufacturing Risk Index.
To continue to maintain this lofty position it is essential to develop world class infrastructure, and it is clear that the Government sees that and is acting. Most recently, in the 2023 Budget, the 33% increase in capital expenditure from last year’s Budget demonstrates the government’s commitment towards building a stronger base for manufacturing and connectivity.
In her budget statement, the finance minister pronounced a pro-growth agenda with a massive capital outlay in infrastructure, green growth and tech enabled projects and impetus to ‘Make in India’ and ‘Aatmanirbhar Bharat’ programmes to accelerate India’s growth in the manufacturing sector.
Investments in infrastructure is helping India in boosting its economic potential in both the short and long term. For example, the recently inaugurated Nagpur-Mumbai Highway which covers 701 km in 6 lanes and Delhi-Mumbai expressway which will cover 1350km in 8 lanes and go through 5 states are helping to strengthen regional connectivity. Complemented by the high-speed rail lines and new airport developments across the country. This is welcome news to manufacturing companies as these investments will drive down logistic costs often cited as a barrier in India.
The finance minister has further proposed extension of 15 per cent corporate tax rate to new manufacturing co-operative societies incorporated till 31st March 2024 which was earlier available only for companies. Carry forward and set off losses for start-ups which was earlier available for 7 years has now been increased to 10 years. Moreover, for incorporation of new start-ups eligible for exemption, the period has been extended for another year, till 31st March 2024 too.
These and other steps taken by government will continue to boost the manufacturing sector in India. So for global manufacturers the question is no longer why India but how India.
The UKIBC can help you to take advantage of this immense opportunity, with expertise to guide you on the necessary regulations, understand the market, and develop your market entry strategy.
Feel free to book a free consultation with me – drop me a line at firstname.lastname@example.org.