India raised Foreign Direct Investment limit in Defence Production to 74% in automatic route. 

New Delhi

In order to attract more investment, India raised foreign direct investment limit in Defence production from 49% to 74% in automatic route. 


India, with an annual Defence budget of USD 70 billion in 2020-21, ranked 3rd globally after USA and China, also made it mandatory that all Defence procurements up to USD 26 million is to be done from companies in India.


There are many thousands of Manufacturing companies in India that provide high-quality manufactured Components and products at low cost to the customers across industries - Aerospace, Automotive, Oil & Gas, Energy, Cement, Steel, Infrastructure, Material Handling, and many more.


India would be the location of choice for Manufacturing companies across the globe for sourcing, forming Joint Ventures, and establishing manufacturing facilities if there is an awareness on the real strength of Indian companies and the opportunities available.


India has a well established Manufacturing ecosystem with high technology machines, skilled manpower, experienced professionals with excellent quality assurance and production management systems in place. All these could be readily utilised at a fraction of the cost of establishing a new facility.


For companies which are planning to establish Manufacturing facilities in India it is possible to:


•Hit the ground running by acquiring well established companies at reasonable cost and avoid delays and uncertainties.


•Form Joint Ventures with good  Indian Manufacturing Companies with complimenting competences and capabilities for a win-win situation. 


•Safely outsource work to Indian Companies with considerable cost advantage. Outsourcing manufacturing to the right companies with all the facilities, expertise and experience comes with savings on cost and offers the flexibility and agility to adjust to the changing market scenarios.


Advantages that Indian companies offer:


•India offers one of the lowest labour costs in the world.

•As a well established Manufacturing hub, very many Indian companies have the experience and expertise to do high precision components and products.

•Due to the capacity expansions done of late and the current slump in market, enough capacity is readily available to take up new orders.

•Intellectual property regulations in place to protect the interests of companies outsourcing work to India.

•With a population of 1.4 billion, India itself is a big market.


There are millions of Small and Medium size Manufacturing companies  in India spread across the vast country. Identifying the right partner is the key to success. 


On Date: 
Monday, May 18, 2020
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