Despite being the fastest-growing large economy, it hasn't been able to attract big multi-billion-dollar investments from large MNCs for manufacturing facilities in the country although FDI in manufacturing has soared
Former Reserve Bank of India (RBI) governor Raghuram Rajan has often expressed why India must focus on expanding its services sector rather than replicating China’s model of manufacturing-led growth. It is a template that hasn’t worked for India for the past many years, he argues. But manufacturing is central to the government’s agenda as it strives to achieve a double-digit GDP growth rate.
The Narendra Modi government has rolled out the red carpet for foreign companies to invest in India’s growth story. In the past, several major multinational companies (MNCs)—Cairn Energy, Hutchison, Docomo, Lafarge, Carrefour, Daiichi Sankyo, Henkel—have exited the country, citing an unfriendly business environment among other reasons. Between 2014 and November 2021, over 2,700 foreign companies and their subsidiaries have shut shop in India.