<\/p>\nnational budget to guide economic policy and structural reforms<\/p>\n
<\/a>.\u00a0Its recommendations in the past three years have coaxed the Indian government to focus on issues like energy security, deregulating the nuclear energy sector, and training people for sectors such as healthcare and tourism.<\/p>\n
The 2026 report advises India to streamline its policies for industrial growth, employment and technological innovation. It can leverage its young workforce, unrivalled domestic market and relative political stability with more intentional policies to attract FDI in sectors where India can feasibly build \u201cstrategic indispensability\u201d.<\/p>\n
Investors that ST spoke to said India\u2019s rival in the global manufacturing supply chain is not China, but smaller Asian economies that have fostered robust licensing policies, industrial zones and skilled manpower.\u00a0\u00a0<\/p>\n
Dr Nageswaran suggests emulating some policies adopted by emerging economies such as Indonesia, Mexico, Poland, Morocco and Vietnam to effectively leverage the trade and investment reorientation employed by China and the US.<\/p>\n
The survey called these \u201cconnector countries\u201d because they position themselves as conduits for global trade and investment, offering multinational enterprises not just subsidies, but also tax incentives, and export-oriented policies for strategic sectors.\u00a0<\/p>\n
\u201cIndia is somewhat late to the game… It has to work doubly harder than East Asian countries that had a much more conducive and favourable geopolitical backdrop (like a ready US market since the US-Soviet Union Cold War) and didn\u2019t have the compulsions of not being able to use affordable and cheap fossil fuel,\u201d Dr Nageswaran told ST.\u00a0<\/p>\n
While India\u2019s political stability, sustained growth, young talent and an enormous market are magnets that attract capital, foreign investors respond more strongly to speed, predictability and high-level political backing than to a spread of overlapping incentives, he said.\u00a0<\/p>\n
The survey highlights Vietnam\u2019s Decree 19, a special investment procedure the government launched in 2025 to streamline licensing for high-tech investments with quicker, simpler clearances and defined timelines. This, in addition to industrial zones and an extensive slate of free trade agreements (FTAs), attracts export-oriented manufacturers.\u00a0<\/p>\n
Similarly, Malaysia\u2019s Golden Pass scheme targets start-up entrepreneurs and venture capitalists as part of its investment strategy, while the Philippines\u2019 Create More Act allows investment promotion agencies to issue special visas to foreign nationals with highly specialised skills.\u00a0\u00a0<\/p>\n
Mr Simon Lee, vice-president of the Taiwan Chamber of Commerce in India, said that as labour scarcity and cost grow in some South-east Asian countries, India must \u201cact faster to divert investors towards it\u201d. <\/p>\n
One way is by giving longer business visas to Chinese technicians, who are crucial to get factories up and running, he told ST. <\/p>\n
India now gives only a renewable six-month business visa to engineers and technicians from China. This visa, too, is part of attempts to revive India-China ties, which have worsened since 2020 over unresolved border disputes, leading Delhi to block most imports, investments and workers from China for several years. <\/p>\n
\u201cSuch factors as the availability of the best technicians in the world and infrastructure that actually works, end up determining if a contract manufacturer like Foxconn will put an additional factory in Vietnam or India,\u201d Mr Lee said. <\/p>\n
\u201cIn the past decade, Taiwanese companies looking to invest have compared Vietnam, Cambodia and India. The former two have often won out for quicker turnarounds because they have a lot of developed industrial land and plug-and-play parks ready. India has these, too, but not at the scale and quantity Vietnam has built,\u201d he added. <\/p>\n
He added that India\u2019s vast domestic market and young, trainable labour are its unique draws for manufacturers, and the recent FTAs India has signed with the European Union and Britain and simplified labour codes are \u201csure to put investors at ease\u201d. <\/p>\n
\u201cA lot of FDI went to Vietnam and Cambodia 10 years ago instead of India. Over the next two to 10 years, these investors might shift to Indonesia\u2019s Java if India doesn\u2019t take advantage of the opportunity,\u201d he warned. <\/p>\n
Dr Nageswaran acknowledged that India \u201chas to do a lot in a short timeframe\u201d before it is overtaken by other economies, or loses its demographic advantage. In the Economic Survey, he provides a framework to narrow the investor chase down by developing \u201cresilience and indispensability\u201d in strategic sectors rather than diluting limited state capacity and efforts across many areas. <\/p>\n
\u201cWhat you cannot do without, where alternatives are not easily available, one has to indigenise immediately (with state investment) even if temporarily costly. Where there is high urgency or importance but low feasibility, the government has to become extremely active in supporting it,\u201d he said, referring to how India should prioritise strategic sectors and capabilities.<\/p>\n
The rest can be done by private companies, for whom private gain is bound with the collective goal of national transformation, the survey notes. It offers examples where corporations become institutional partners in broader national projects, like Bell Labs and IBM in the post-war US, and keiretsu groupings around Nissan, Toyota and Sony in Japan. <\/p>\n
Another model offered as an example was Taiwan\u2019s dense networks of small and medium-sized firms embedded in local communities and global supply chains. <\/p>\n
\u201cWe need to take a leaf out of the book of these successful East and North Asian countries, and monitor to make sure that investing companies use the industrial policy and protection afforded by the Indian government to really become globally competitive,\u201d Dr Nageswaran said.<\/p>\n","protected":false},"excerpt":{"rendered":"BENGALURU \u2013 To live up to its foreign investment potential in a period of uncertainties, India can take…\n","protected":false},"author":2,"featured_media":299866,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[114,184,85,46],"class_list":["post-299865","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-il","tag-israel"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/299865","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=299865"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/299865\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/299866"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=299865"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=299865"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=299865"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}