Economy

India envisions excellent traction for digital healthcare in the coming years as a sustainable solution to meet unmet needs. However, a broader healthcare ecosystem and appropriate infrastructure are required to support the digital endeavor.

COVID-19 has been the cornerstone of emerging innovations in digital healthcare tools. Responsive to the pandemic, communities, and countries worldwide are now gearing up to scale up digital tools. Digital healthcare tools gained significance when the pandemic strained the global medical systems. In a crisis, these tools enhanced efficiency and enabled almost real-time data sharing, aggregation, and analysis.

Everyone is covered by digital healthcare, from healthcare professionals and managers to end users, such as caregivers and patients.

Global Digital Health Summit in India

India hosted its first-ever Global Digital Health Summit, Expo, and Innovation Awards in New Delhi on 22nd October. The two-day Global Digital Health Summit was inaugurated at Vigyan Bhawan, New Delhi. The grand event marked the launch of Digital Health Mission. United Nations and several other global bodies working towards digital healthcare tools attended this prestigious summit.

Sri Jitendra Singh, the Union Minister of State, believes that the launch of 5G will aid in digitalizing healthcare services. While speaking at the event, the Union Minister stated that India has been an example to other countries. Other countries look up to India for how it handled such a large and diverse population.

• Democratization of Technology: The Global event emphasized that nearly 80% of individual doctors, small clinics, and small hospitals are still not using technology. Their concerns stem from the return on their investment in technology and application methods. The summit aims to enlighten healthcare providers about adopting new technologies.
• Plan for modernizing traditional medical practices: This interactive summit sheds light on how 5G, Metaverse, and other technological advancements can reshape the standard medical setup. Eminent global leaders discussed how the latest technology can boost the return on investment for an individual or an organization.
• Government Initiatives and Strategies for Digital Health Revolution: In this article section, we will learn how India is accelerating its pace to establish its digital healthcare footprint. We will also discuss the initiatives taken to leapfrog our penetration to the most remote parts of the country.

These initiatives are targeted to build our digital healthcare tools and digital infrastructure of the country. In addition, the Make in India initiative includes producing indigenous goods and developing autonomous healthcare systems.

The primary organizations responsible for governing and implementing the various initiatives are- the Ministry of Health and Family Affairs, the Ministry of Electronics and Information Technology, and the National Health Authority.
Ms. Binu Sharma, Senior Director of Nursing at Max HealthCare Institute, and other dignitaries from hospitals, pharma, and clinicians addressed the summit on the challenges and solutions of adopting Digital Healthcare tools.

About National Digital Health Mission (NDHM)

On the eve of our 74th Independence Day, our Prime Minister, Shri Narendra Modi, launched the National Digital Health Mission. Our present digital infrastructure that connects people through Aadhar-based identification acts as a launching pad for NHDM.

NHDM is universal health coverage that is secure, inclusive, effective, and affordable. A few of the salient features of the scheme include the following-

• Digi Doctor A repository of doctors with complete details such as name, address, experience, specialization, etc. This data will be shared and updated regularly.
• Health Id- A unique Health Id (UHID) similar to Aadhar.The individual’s previous medical history and investigation results will be shared with healthcare providers and stakeholders with their consent.
• Health Facility Register– Collective database of private and public health facilities across the country.
• Personal Health Records (PHR)– Medical data of an individual in electronic form that can be accessed across multiple channels. Only the concerned individual can edit/update the PHR records.
• Electronic Medical Records (EMR)– This application will hold all the patient details, such as past illness history and the line of treatment adopted. An essential tool for health providers to monitor health and suggest investigations when required.

Ayushman Bharat Digital Mission

Our honorable PM launched the ABDM in August 2021 as the next step toward developing digital healthcare tools. This initiative is envisaged to standardize and simplify the healthcare system in the country. This scheme allows for digital consultation and the preservation of old medical histories while protecting the patient’s health-related information privacy.

The Ayushman Bharat Digital Mission’s essential parts include the following.

• ABHA Number- Ayushman Bharat Health Account (ABHA) number is unique to each patient. Accessing medical records is not possible without proper authentication and consent of the patient.
• Healthcare Professionals Registry (HPR)- Healthcare professionals who practice on traditional or digital platforms can now enroll here to provide their services.
• Health Facility Register (HFR)– Inclusion in this repository will allow healthcare professionals to stay connected to India’s digital ecosystem.
• Unified Health Interface (UHI)- Bridge the gap between patient and healthcare provider by facilitating teleconsultation and other services.
• ABHA Mobile App (PHR)- Health-related information of an individual conforming to the national standards and privacy laws.

Revolutionizing Healthcare by Digitalizing Pharma Supply Chain

NHDM aims to achieve a resilient digital healthcare infrastructure in the country by investing in the digitalization of the pharma supply chain. Integrating digital healthcare tools and AI-driven technology to create a database that can be used for chronic disease treatment and human welfare.

Key Takeaways

India is at the cusp of a digital health revolution. Emerging health technologies such as telemedicine and artificial intelligence are changing India’s healthcare system landscape. With the growing global adoption of therapeutic digital healthcare tools investing in these tools is the right way to create a massive backup for research and convenience.

Increasing investments could also mean great opportunities to invest in stocks of such businesses. Invest only after thoroughly studying the company’s moats, opportunities, and financials. If you are confused, connect with a financial advisor to plan your investments.

FAQs

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Foreign trade in the current economic landscape is centered around US dollars. Financial experts refer to it as the ‘Dominant Currency Paradigm’ or DCP as it is undoubtedly the ‘go to’ monetary source, destination, and vehicle currency for most countries to carry out foreign trade.

This has been the case historically.                              

What’s the Backstory of the Trade Through Rupee Accounts?

The role and dominance of the dollar in foreign trade have been brought into question as the Biden administration, for the first time, attributed ‘inflation’ as a critical global threat with the likes of Russia and China. However, the US Strategy paper said that this inflation was no longer a domestic issue and highlighted the struggle of people all over the world.

You can lay partial blame on the Russia – Ukraine war and the pandemic that were the key reasons behind bolstering price rise and inflation across the globe.

The Federal Reserve, the US central bank, has periodically increased interest rates to curb price rise and inflation on the domestic front. However, it has not helped drive a reverse price rise trend in the long term. The significant consequence of this has been felt across developing nations despite many of them not carrying out foreign trade with the US directly.

What Does It All Mean for India and its People?

Inflation in the US spreading across the globe has led to a weakening rupee against the dollar as the US bank rates keep rising intermittently. This has created concern at the national level despite other vital factors, such as a positive increase in GDP driving growth in the Indian economy.

The typical Indian is the one who is most impacted by the weakening rupee and increase in dollar rates as India continues to transact the bulk of its foreign trade in US dollars. It will help to put things into perspective.

When it comes to India’s foreign trade, 60% of financial transactions are done in US dollars, 86% of which are for imports alone. Even if the exporter settles in rupees, the sovereign-level transaction happens in US dollars.

• Every year India imports significant quantities of gram and dals which ultimately is food for Indians both rich and poor.
• Palm oil is also a key commodity that India imports, which many Indian households use.
• Also, consider the Indian students who are currently enrolled in US universities where parents are having to fund their education by shelling out more because the rupee is weak against the dollar

In a nutshell, the rise of the US dollar has been detrimental to India’s foreign trade.

Has India Found a Way Forward?

The rupee fell to a record low against the US dollar combined with a sharp price rise in global commodities such as oil. It has driven trade and current account deficits to worrying levels.

As the bulk of the foreign trade transactions takes place in US dollars it was important for the central government in collaboration with the Reserve Bank of India to come up with a way forward that will turn around the Indian economy for the better.

In alignment with this thought, the RBI issued a circular on the 11^th of July 2022 that established a framework allowing Indian companies involved in foreign trade to invoice, pay, and settle their export and import orders in Indian currency in addition to the regular payment modes.

Promoting trade through a rupee account would help the interest of Indian exporters and support a global trading community wanting to do business in INR. The integration of the rupee AC will enable Indian companies to settle their accounts with other countries in INR. In theory, this move could possibly become an alternative to SWIFT.

The idea became more concrete when India wanted to trade with Russia as the US imposed sanctions and denied Russia access to the SWIFT system. Other than simplifying foreign trade with Russia, the system is designed to check the US dollar outflow from the country. This, in turn, would automatically help to slow down the pace of the rupee depreciation against the US dollar to some extent.

How does the Rupee AC Trade System Work?

The proposed Rupee AC trade framework by the RBI enables the settlement of foreign trade transactions with any partner country. To initiate the transactional relationship, Vostro accounts correspondent bank/s of the partner country would have to be opened in banks in India to kick off the trade. Indian importers will then be allowed to make payments for their imports into the country in Indian Rupee directly in these Vostro accounts.

What are the Long-Term Benefits for India?

RBI’s priority in encouraging a shift toward trading via rupee accounts was to minimize foreign trade deficits. This would allow India to raise its proportion of oil purchases from Russia at affordable prices. Moreover, this will establish a more transparent and efficient system of foreign trade and pave the way for the INR to be accepted as a global currency for foreign trade.

India already has new free trade agreements (FTA) with countries like Australia and the United Arab Emirates and is in the negotiating stage to sign more with the likes of the European Union, the UK, and Canada. India can potentially increase their level of economic engagement with FTA partner countries with a pre-existing international settlement mechanism in the Indian Rupee in place.

The Bottomline

India’s proposal of a Rupee AC has already sparked interest in the international community with four to five countries expressing interest in settling foreign trade transactions in Indian rupees. Moreover, a push towards de-dollarizing can promise several long-term structural benefits in India’s international trade going forward.

FAQs

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Jogigpoha in Assam has recently been creating headlines in the leading national newspaper. Jogigpoha, a small town on the northern bank of the Brahmaputra River, will be India’s first MultiModal Logistics Park (MMLP) and be part of the “Kaladan Multi-Modal Transit and Transport Project” when linked to Myanmar through Mizoram.

Assam approved the transfer of 200 acres of land owned by the now-defunct Ashok Paper Mill for the project following the Government’s decision. Jogigpoha in the Bongaigaon district is strategically located and has the potential to significantly improve India’s logistics.

The Multimodal Logistics Park project will be carried out in two stages. In the first phase, 102 acres of the park will be outfitted with external roads and rail to connect to inland waterways. The remaining 88 acres for the inland water terminal will be developed in the second phase.

The upcoming project at Johigpoha, Guwahati, is perceived as a game-changer in improving India’s competence and quality in logistic services. According to a report by CII and Arthur D, the cost of transporting freight can account for up to (13-14%) of our GDP. It is nearly double the price of developed economies (7-8%) and significantly higher than other BRIC countries by 9-10%.

First, let us look at the factors that give Jogigpoha a competitive advantage in becoming a significant logistics and export-import hub.

• Jogigpoha connects not only the Northeast but also eastern India and countries such as Bhutan, Nepal, and Bangladesh. Products from these countries can be easily imported for further export or transported to other parts of the country.

• Jogighopa is located 175 km by road from Phuentsholing, a significant trading and transit point on the Indo-Bhutan border.

• Jogigpoha is 300 km from Kakarbhitta, a massive trading and trans-shipment hub on the Indo-Nepal border.

• It will be easier to export products from North Bengal’s Dooars and Darjeeling Hills areas, which are well-connected with Jogigpura. In addition, Jogigpura can significantly reduce the burden on the overcrowded Bagdogra Airport in Siliguri.

• Jogigpura is also close to the Brahmaputra River, our predominant inland waterway connecting Bangladesh. Goods in large volumes from Bhutan, North Bengal, and North East can easily be transported to other destinations.

This flagship project is part of the Government’s “Bharatmala Pariyojna” initiatives, which aim to make Northeast India’s economic powerhouse.

Overview of Multimodal Logistics Park (MMLP)

The National Highways Logistics Management Limited (NHLML) of the Ministry of Road Transport and Highways (MoRTH) and the National Highways Authority of India (NHAI) are in charge of the Multimodal Logistics Park, which is a Government of India initiative.

In 2017, the Government of India launched this program to build 35 MultiModal Logistics Park/s (MMLP) across the country through Public-Private-Partnerships. The proposed investment in this ambitious project is about Rs. 50,000 Crores. 

Objectives of India’s Multimodal Logistics Park(MMLP)

The intent driving the program was to reduce India’s logistics costs and combat five constraints-

• aggregation and distribution of freight,
• freight transportation via multiple modes,
• storage and warehousing combined,
• assistance with information technology, and
• services with added value

How High Costs of Logistics Are Impeding Our Economic Growth

The high cost of freight transportation is putting pressure on manufacturers while significantly reducing their profit margins. Lower profits for an extended period may have an impact on India’s future as a manufacturing hub.

The cost of road transport is whooping high and dominates the price escalations in high-value items such as auto parts, automobiles, pharmaceuticals, hardware, tiles, marbles, sanitary items, furniture, fixtures, steel molded products, and a few more. 

Automobiles accounted for the greatest value in Indian transport equipment exports in the financial year 2022. This amounted to more than 6.8 billion US dollars.

In the financial year 2022, India’s value of exports of railway transport and parts was approximately 416 million US dollars. This was a sizable increase from the previous financial year’s figure of 135.3 million dollars.

Reducing the monopoly of road transport can lead to robust economic growth. We must introduce special parcel trains, modernized cargo booking, delivery outlets, and high-speed freight corridors to give our Indian manufacturing industry a strategic edge.

Challenges in Roadmap to Reduce Logistics Cost

The major bottlenecks to production synergies and lowering logistics and trade costs are higher transportation costs and procedural delays.

• Overpacked rail networks
• Ships have a long turnaround time due to overcrowded berths and cargo evacuation delays.
• Acceptance of technological advances

India’s first MultiModal Logistics Park is proposed to be built on a massive area of over 317 acres at Jogishopa in Assam. Loaded with multiple facilities like a Warehouse, cold storage, yard, petrol pump, parking, lodging, etc, MMLPs aim to reduce the logistics costs by a minimum of 10 %. 

Benefits of Multimodal Logistics Park and Lowering Freight Costs

If we work towards lowering our logistics costs and improving our transport systems, we can gain better access to international markets and increase trade. Mr. Nitin Gadkari, Union Minister of Road Transport and Highways, too emphasized the importance of lowering our current logistics costs by nearly 10% to achieve greater economic viability.

 Some of the appealing advantages are :

• End-to-end transparency and visibility in the supply chain and logistics cost regulation.
• Smooth management of storage and distribution of goods in warehouses.
• Forecast product demand
• Better inventory management and preventive maintenance.
• Intelligent route planning to optimize delivery operations.

While addressing the event, “Climate Goals: Technological Roadmap to Net Zero”, he stated that by cutting our logistics costs, we can multiply our savings and boost exports by almost 50%. With technology, innovation, and research we can significantly lower our logistics cost building a fertile ground for manufacturers, entrepreneurs, and innovators at large. 

The Final Thought

MultiModal Logistics Park  (MMLP) lay the foundation to reshape the infrastructure and encompass various logistics segments. It aims to streamline freight traffic, cold chain transportation, and warehousing. The Government intends to use digitalization to expand India’s logistics landscape so that it can compete with its global counterparts.

FAQs

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How does a successful technology transfer or manufacturing of high-tech products benefit a nation? To understand, we don’t have to look far beyond, as India is the best example. From manufacturing Covid-19 vaccines for the world to producing long-range air superiority fighters for the Indian Air Force, it has helped India to create an ecosystem of highly skilled workforce and capabilities to pursue new opportunities.

And Airbus Tata collaboration for manufacturing the C-295 transport aircraft is a shot-in-the-arm development. So let’s understand how it will push local manufacturing and benefit the Make in India initiative.

Overview of Airbus Tata Collaboration

In September 2021, the Ministry of Defence (MoD) signed an estimated ₹21,395 crore deal for 56 C-295 transport aircraft with Airbus Inc for the Indian Air Force.

The entire project is unique, and the first-of-a-kind project for India as the military aircraft will be manufactured in India under the transfer of technology by a private sector company. To bag the deal, Airbus, along with its Indian partner, Tata Advanced Systems Ltd (TASL), placed the bid.

Only Hindustan Aeronautics Limited (HAL) was known to execute such transactions earlier. And the silver lining is that the production line will meet other countries’ export needs. Making significant progress on the deal, on October 30, 2022, Prime Minister Narendra Modi laid the foundation stone of the manufacturing facility in Vadodara, intending to roll out the first aircraft in September 2026.

Airbus Tata Collaboration- A Case of Make in India

The manufacturing of C-295 in the country is a significant development. It will help India become a global manufacturing hub, support the development of indigenous products and R&D, and allow rapid modernization. For instance, TASL will partner with TCS and more than 125 MSME suppliers to manufacture C 295. The project may generate 600 highly skilled jobs, over 3,000 indirect jobs, and additional 3,000 MSME opportunities generating 4.25 million man-hours of work.

The experience will go a long way in manufacturing high-tech defense products and create a new ecosystem for manufacturing fixed-wing aircraft, the capability which India lags.

For instance, HAL recently completed the deal of manufacturing 140 Sukhoi 30 MKI for the Indian Air Force. Over the year, HAL developed over 2,000 Micro, Small, and Medium Enterprise (MSME) vendor bases for the Sukhoi project that will now be used to ramp up the capacity to overhaul aircraft. Also, the production line can be used in manufacturing India’s next-generation fighter aircraft like the Tejas-MK-1A or building 5th-generation fighter aircraft.

Why is Defense the Focus in Make in India?

The Airbus Tata Collaboration is one more example of how the government is focusing on ramping up defense manufacturing capabilities under the Make in India initiative.

The country must have hi-tech manufacturing capabilities to catch up with the pace of the developed world and new emerging economic scenarios. And large defense orders with offset clauses play a significant role in developing hi-tech industrial capabilities for the country and generating meaningful employment opportunities.

And India wants to be a vital defense manufacturing hub. The government is helping through a five-pronged approach to working on that objective. In the last seven years, India’s defense spending doubled from $32.4 billion in 2015-16 to $62.8 billion in 2021-22. Simultaneously, the government has made 5 crucial policy changes in defense procurement:

New defense acquisition procedure: The Defense Acquisition Procedure (DAP) 2020 formulated rules for procuring new defense technology equipment with a greater focus on the Make in India efforts and MSMEs. Higher usage of indigenous content, design, and development and improving ease of doing business to attract foreign companies to manufacture in India.

Foreign Direct Investment (FDI): Allowing 74% FDI under automatic route will encourage foreign companies to invest and produce in India.

Technology Development Fund: The scheme aims to promote self-reliance in defense technologies and allow more MSMEs and startups in the defense manufacturing space.

Import Embargo: Banning the import of defense equipment that can be manufactured with indigenous technologies and foreign collaboration in India, thus making room for the private sector to invest and add capacities.

Growth in Exports: One of the key focuses of the new Defense Acquisition Procedure is to meet the requirement for India and make for the world. With exports of just under $255 million or  ₹ 1,940 crores in 2014-15, Indian defense exports have touched  ₹13,000 crores mark in 2021-22 fiscal and have already touched  ₹8,000 crores mark in the first six months of FY 2022-23.

With the government planning to make India a defense manufacturing hub for the world and grow the size of the Indian defense manufacturing industry to $5 trillion by 2047 from the current $1 trillion, it paints a bright picture and opportunities for MSMEs, startups, and private and public companies.

The Airbus Tata collaboration is a much-needed development in that direction. As the Prime Minister mentioned at the foundation stone laying ceremony of the C-295 manufacturing facility, India plans to become a significant transport aircraft producer and manufacture big commercial planes.

If things move in the right direction or as planned, the defense sector will also be the biggest wealth creator of the next decade. Stocks of defense companies like Hindustan Aeronautics, Bharat Dynamics, Solar Industries, Bharat Electronics, etc., have given investors higher double-digit CAGR returns in the last three years.

Does this mean that you blindly invest in defense stocks? No, remember FRAI – find, research, analyze and then invest.

Disclaimer Note: The stocks mentioned in this article are just for information. He/she should not consider this a buy/sell/hold from Research & Ranking. The company shall not be liable for any losses that occur.

FAQs

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“India is on a 50-year rally.” Since early 2022, seasoned investor Mark Mobius has placed his hopes in the Indian market. Mobius mentioned this in an interview with Bloomberg Television.

Mark Mobius, an investor in emerging markets, told Bloomberg that he is placing significant bets on the Indian market to remedy the declining returns from his Chinese market investments. 

Bloomberg reports that the Mobius Emerging Markets Fund allocated 45% of its portfolio to India and Taiwan, with primary market holdings in technology hardware and software. In addition, Mobius has a stake in Persistent Systems, an Indian technology firm, which accounted for 4.2% of the fund at the end of July 2022.

Economic Overview

China accounts for 26.89% of the MSCI Emerging Markets Index, making it the most significant country weight. India accounts for 16.21% of the total. India is now in second place, just behind China.

According to Mark Mobius in a conversation with CNBC, the Chinese index is falling as President Xi Jinping secured a third term at the 20th Communist Congress and installed several loyalists on a critical leadership committee. As a result, it will shift more toward a Maoist economy.

This has raised concerns that PM Xi will wield even more power over China’s economy, which has slowed significantly due to lockdown restrictions and his “common prosperity” agenda.

Mark Mobius also noted that China is still recovering from lockdown restrictions, which has led the International Monetary Fund to forecast only a 3.2% increase in the country’s GDP this year. It could cause problems for its markets, especially since the government has withheld vital economic data and delayed other metrics, such as GDP figures. In contrast, India disclosed its GDP growth rate at 8.7% as of FY22.

That’s not a promising sign! But, as Mark Mobius reminded all, that indicates something is boiling beneath the surface of the Chinese market and won’t be good.

“In India, however, the opposite is true. The government is further opening up the market, welcoming foreign investors, and incentivizing people to enter. As a result, we are witnessing a massive change in the world as India and China, the world’s two most populous countries, move into a historical shift towards India.” says Mark Mobius.

Mark Mobius said, “India is possibly where China was a decade ago.” The Indian stock market has recently been on a roll. It will have a positive impact on the Indian Market Index.

Mobius highlighted earnings are closely linked to GDP. Many individual Indian company valuations are still “reasonable” based on forward-looking price-to-earnings and return-on-capital ratios.

Mark believed some Chinese companies would succeed only if they used a selective approach. In the current climate, active management is crucial. He believes investors must not bet on the Chinese index and expect it to succeed; it may not.”

The US-China Technology War Is Heating Up

It is a significant trend occurring for apparent reasons. First, China could face increasing limitations due to the technological competition between the U.S. and China. The COVID lockdown in China is damaging the country’s manufacturers. Therefore, Mobius believes there are many reasons why manufacturers of technological goods will turn their attention to India.

India Can Deal With Its Trade Deficit

Increased local manufacturing in India is needed to address the significant trade deficit with China. India has a demographic advantage over smaller competitors due to its size, making it capable of doing so. And having domestic manufacturing in India is the best way to achieve that. Nations with smaller populations, such as Vietnam, Thailand, and other smaller countries, may find it challenging to increase local manufacturing.

Still, with a billion people, competitive wages, and a young population, India can boost manufacturing and significantly reduce Chinese imports. He believes that because the supply chain still requires imports from China and other countries, the Indian government must not consider accomplishing its goals through input restrictions like higher import taxes.

What the Indian government should do is encourage local manufacturers so that many of the products now imported from China can be manufactured in India at a lower cost.

The long-term strategy for manufacturing companies should be to relocate to India.

Given that it costs a lot of money to establish manufacturing facilities in a nation, Mobius predicted that this manufacturing shift to India would likely last for a long time. But he added that it would mean businesses assume the environment for investments would remain favorable for the long term. Moreover, India’s infrastructure is good, and the government has friendly regulations; manufacturing will stay once it relocates to India.

Additionally, given that foreign investors have continued to pull their money out of Chinese markets, the investor anticipates that India will likely overtake China in manufacturing stocks.

Indian aspirations to become a global hub are being fueled by the booming manufacturing sector.

According to the FICCI Quarterly Manufacturing Survey findings, the manufacturing sector’s recent rapid expansion is expected to continue for 6 to 9 months. In addition, manufacturing currently has an average capacity utilization of 72%, which indicates sustained economic activity in the industry.

According to IBEF reports, India can develop into a central manufacturing hub and by 2030 it could contribute more than US$ 500 billion annually to the world economy. According to preliminary estimates of the gross domestic product for the first quarter of 2021–2022, India’s GDP, expressed in current prices, was Rs. 51.23 lakh crore (US$ 694.93 billion) in the first quarter of FY22.

The third quarter of FY22 saw an estimated manufacturing Gross Value Added at current prices of US$ 77.47 billion, according to an IBEF report. In June 2022, the production of coal increased by 31.1%, that of electricity by 15.5%, goods from refineries by 15.1%, fertilizers by 8.2%, cement by 19.4%, and natural gas by 1.2%. Purchasing Managers’ Index (PMI) for Manufacturing in India was 53.9 in June 2022.

The Production-Linked Incentive (PLI) was established with an allocation of Rs. 1.97 lakh crore (US$ 27.02 billion) over the following five years to create global manufacturing champions in 13 sectors beginning FY22.

India’s Government Is Acting Quickly

The progress is patchy because of the federal nature of the country’s political system. Still, Mobius felt the center was moving quickly to increase the ease of business in India. For instance, he suggested speeding up the paperwork so that licenses could be granted more quickly.

The speeding up of processes depends on each state in India. A few state governments in India have done a great job attracting investors. Mobius emphasized that India must prioritize manufacturing from a broad policy perspective even as its services sector experiences robust growth.

As noted in IBEF reports, India’s manufacturing sector has the potential to reach $1 trillion by 2025. Implementing the Goods and Services Tax (GST) has turned India into a common market with a GDP of US$ 2.5 trillion and a population of 1.32 billion, which is enticing investors. In addition, the government has plans to focus on developing industrial corridors and smart cities to ensure the nation’s holistic development.

Indian Governments Initiatives to boost manufacturing industry

Mr. Narendra Modi, the PM of India, launched his “Make in India” campaign not long after taking office in 2014 to make India a global manufacturing center. The campaign aims to ensure the manufacturing sector accounts for 25% of the economy, up from 15% in 2014.

The manufacturing sector has received significant investment

India received a total inflow of US$ 58.77 billion in foreign direct investment (FDI) in FY2021-2022, according to the Department for Promotion of Industry and Internal Trade (DPIIT). For almost two decades, the major industries which received FDI equity inflow are the automobile industry at 32.8%, the chemical industry at 19.5%, and pharma at 19.4%.

The National Manufacturing Policy wants manufacturing to account for 25% of the GDP by 2025. The Union Budget 2022–23 set aside Rs. 2,403 crores (about U.S. $315 million) to promote the production of electronics and IT hardware. The Production-Linked Incentives (PLI) for semiconductor manufacturing are set at Rs. 760 billion (US$ 9.71 billion) to make India one of the world’s major producers of this essential component.

Final Words

Investors should exercise caution when investing Chinese market, Mark Mobius advised. The Indian government has recognized the manufacturing industry’s potential growth and provided incentives and support to change the manufacturing industry.

At the same time, he highlights India’s potential to revolutionize hardware technology and provides a bullish perspective on the Indian market. Remember that due diligence before investing is crucial if you want to invest in China or India. So, thoroughly study the market, the company, its moats, challenges, and future prospects before investing. Long-term investments can help you create wealth.

FAQs

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