FDI and Manufacturing Electronics in India

Published: November 2011

Two years ago, a conference of the State Industry Ministers put forth the goal to increase the contribution of the manufacturing sector to GDP from 16 percent to 25 percent.

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  • No. of Pages: 12 pages

Two years ago, a conference of the State Industry Ministers put forth the goal to increase the contribution of the manufacturing sector to GDP from 16 percent to 25 percent. The manufacturing sector’s contribution to India’s GDP is considered low when compared to other Asian economies (in which manufacturing contributes more like 25 to 34 percent to GDP) and is seen as not fulfilling its potential. To remedy this, the recently released National Manufacturing Policy has set clear objectives to harness the sector for economic growth, including an emphasis on FDI and foreign technologies.

Meanwhile, policy makers are in the midst of a major push to establish India as an internationally competitive electronics system design and manufacturing hub. Electronics and strategic electronics are at a similar point of inflexion as the information technology IT/ITES industry was a decade ago, according to the draft National Policy on Electronics, 2011.Demand for electronic hardware in India is growing, driven by growth in income levels, automation demands of the private sector and the focus on e-governance.

In this issue of India Briefing, we walk you through the National Manufacturing Policy, the draft National Policy Electronics, and other related policies and schemes key to foreign investment in the sector.


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