Manufacturing FDI into India on an upward curve

According to greenfield investment monitor fDi Markets, manufacturing FDI into India reached its highest level in 2018 since 2011.

India has seen a 40% increase in manufacturing FDI between 2017 and 2018, rising from 139 projects in 2017 to 228 in 2018. The number of jobs created in 2018 is up 53% on the previous year, with total planned capital expenditure into the country amounting to $28.58bn, an increase of 67% on 2017 figures. FDI manufacturing inflow has increased rapidly since 2013, but experienced a sudden drop in 2017, with the number of jobs created dropping by 45%, projects created decreasing by 30% and capital investment decreasing by 63%.

Chennai recorded the highest inward investment, with 18 projects and a capital investment of $1.73bn. Bangalore reported the second highest number of manufacturing projects, attracting 13 projects in 2018 and a capital investment of $1.78bn.

The primary source for investment into India’s manufacturing is the US, investing in 39 projects and a capital investment of $1.63bn. Japan closely followed with 31 projects and a capital investment of $4.41bn. US-INOX Air Products was responsible for 16 projects in India which accounted for 100% of the company’s foreign investments in 2018.

Automotive OEM has generated the highest number of total jobs and the largest project size, with 1229 jobs per project. Metals had both the highest total and highest average investment at $65.34bn overall and $301.1m per project. Industrial equipment created the largest number of projects, totalling 486, with automotive components closely behind with 379.

Prime minister Narendra Modi’s ‘Make in India’ programme was created to put India on the world map as a manufacturing hub and bring global recognition to the Indian economy. India is expected to become the fifth largest manufacturing country in the by world by the end of 2020.