By Shailesh Yadav
New Delhi [India], May 25 ANI): The record Foreign Direct Investment (FDI) in India shows the confidence of international investors in the Indian economy. China is the manufacturing factory of the world but it is seen that many companies have shifted out from China in the last few years.
Many countries including India are trying to grab this opportunity and inviting those companies to shift their base from China. India attracted record FDI of 81 billion USD in financial year 2021 and this shows that foreign investors have shown confidence in Indian economy, said Nilesh Shah, Managing Director, Kotak Mahindra Asset Management Company.
In an exclusive interview to ANI, Shah elaborated the reason behind the highest ever total FDI investment and said, "This shows that foreign investors are showing confidence in Indian economy. Secondly, companies are shifting their base from China to India. Thirdly out of this 81 billion USD, a big amount of investment came in digital and startup economy. India attracted the highest ever total FDI inflow, which includes equity capital of unincorporated bodies, reinvested earnings, and other capital. Total FDI stood at 81.72 billion USD, up 10 per cent YoY. In FY20, India attracted gross inflows of 74.39 billion USD."
Shah said that the Indian government has selected 13 sectors for production linked incentive (PLI) schemes. Many years ago the government launched textile upgradation fund under which it gave concessional funding to set up factories, said Shah further stating that the vision was setting up factories will boost production and India will become textile hub of the world, but people siphoned off the money and the fund became a non-performing asset (NPA).
This PLI scheme is for production and sectors like electronics, electricals, mobile phone, automobiles, textile which will be given incentives on production. Samsung has shifted its mobile company from China to India. Indian govt is trying to have more companies related to these 13 sectors, he said.
Shah further said, "We remember that in 1980 India and China were equal, but today China is known as manufacturing factory of the world and is 5 times bigger than India. We need to catch up on this gap. We are number one in services and called back office to the world, but we lack in manufacturing. Now PLI scheme can become game changer. Through this scheme we can bring global companies to India."
He stated that when Samsung came in India, they manufactured their product for sale in India only, adding that Samsung is the biggest consumer durable company in India with turnover of around 12-13 billion USD.
Shah also mentioned that in Vietnam, Samsung manufactures products to export to the world and their Vietnam turnover is around 60 billon USD, adding that Vietnam is 1/10th the size of India's GDP but the same company has five times the turnover as compared to that of India.
He elaborated that the aim of the Indian government is to bring Samsung like companies to India. PLI scheme will help in this purpose and it will create manufacturing employment and that will support our domestic economy and global economy too, he added.
"Remember when we started manufacturing of automobile when Suzuki came to India and when Honda came to India then there was small market of automobiles. Today we export cars and two-wheelers to every part of the world. If we are able to bring such companies in those sectors selected for PLI scheme, then India can become manufacturing hub to the world like in services we are called back office to the world," added Shah. (ANI)