India, which was formerly thought to be one of Asia's developing nations, is now the world's fifth-largest economy and has made significant strides in the field of technology. For businesses from other nations, it has developed into a center. In 2022, India received the seventh-largest amount of foreign direct investment. Due to its sizable labor and customer base, cheap operating costs, and connections to significant international markets, India is proving to be a reliable alternative location for manufacturers and supply chain diversification when geopolitical events develop.
Besides, practically India’s $3 trillion equity market cap comes from companies with Indian incorporation. Our expansion has so far been predominantly fueled by the listing of domestic Indian companies. The government and the entrepreneurs are encouraging foreign companies to list in India as a secondary listing in order to expand our markets and give local investors more options for companies to invest in. Additionally, the country should promote the use of Indian exchanges as a supplementary listing base for businesses promoted by Indians but incorporated and listed only outside of India.
Companies That Have Registered to Manufacture in India
Up to 44 IT hardware manufacturers, including major PC manufacturers from around the world, have registered to produce laptops, tablets, and personal computers in India. The country's IT hardware production is anticipated to replicate the success shown in the production of mobile phones under the production-linked incentive (PLI) plan.
Some of the leading laptop manufacturers have registered for PLI and are prepared to begin production in India at any time. International server manufacturers have stated their desire to turn India into a hub for server exports. The government has set the deadline for producing IT gear under the Rs 17,000 crore PLI scheme.
Lenovo, HP, Dell, Apple, and Acer are the top five laptop manufacturers that intend to manufacture in India, according to sources. About 65 percent of the laptops and PCs sold in India's market, which is worth close to $8 billion yearly, are imported. With PLI 2.0, India's push to manufacture IT gear, particularly laptops and tablets, gained additional momentum. In the upcoming two to three years, the companies anticipate that local manufacture of IT hardware devices in India will satisfy 60 to 65 percent of domestic demand.
Lava International co-founder, Chairman, and Managing Director Hari Om Rai says that “The decision to restrict imports via valid permits is a great move by the government. It will add 10 billion dollars to laptop manufacturing, billions of dollars of components, and millions of jobs. It is also a very big milestone in building the much-needed scale of the supply chain of electronics in India.”
The government has made sure that the supply chain is not interrupted so that businesses will not experience any difficulties operating normally and customers will continue to receive goods at the same price. 3.9 million units were shipped in the quarter ending in March 2023, which is a significant year-over-year fall of 35 percent for the Indian PC market for desktops, laptops, and tablets. The Indian PC industry, which includes tablets, is expected to return quickly with an 11 percent rise in 2024 and an additional 13 percent growth in 2025 after a quiet 2023, according to Canalys.
In order to support the domestic component ecosystem, the government's IT and hardware division has offered incentives for locally produced components. According to reports, a non-tariff measure like a license to examine imports will increase domestic output. Malware or spyware can also be on imported computer hardware. In the past, we've encountered cases like this. The limits put in place by the government to ensure that gadgets are bought from reputable and secure sources are entirely appropriate.
How is India Attracting Other Countries?
The Ukraine crisis has led to triple crises in food, fuel, and money, as well as the COVID-19 epidemic and climate change. According to reports, inflows of FDI (Foreign direct investment) into the nation reached an all-time high of 84.84 billion in 2021–22. On the other hand, FDI equity inflows into India decreased by 14 percent to 26.9 billion during the April-September period of this fiscal. In addition, the total FDI inflows which also include stock inflows, reinvested earnings, and other capital—have decreased to 39 billion from 42.86 billion at the same time last year. On the other hand, FDI equity inflows into India decreased by 14 percent to 26.9 billion during the April-September period of this fiscal.
The entire amount of FDI inflows, which also includes equity inflows, reinvested earnings, and other capital, fell to USD 39 billion in the first half of this fiscal year from USD 42.86 billion in the same period last year. Secretary in the department of in the Department for Promotion of Industry and Internal Trade (DPIIT) Anurag Jain said India is the preferred investment destination due to a series of measures such as liberalization in the FDI policy, steps to further promote ease of doing business, reducing the compliance burden for industry, the rollout of the PLI schemes and the PM GatiShakti National Master Plan for integrated infrastructure development.
The company's past financial and operational performance. As a precaution, it may be applied to IDRs to give QIBs a higher allocation along the lines of 6(2) ICDR regulations that apply to the listing of an Indian firm. Many Indian-owned businesses, both in the traditional and new-age sectors, are listed on international stock exchanges but not in India. They might seize this opportunity and view Indian markets as their secondary listing.
According to reports, a history of distributable profits for at least three of the most recent five years is the second most crucial factor. I feel that a sectorial approach to this need is necessary. In some industries, like infrastructure, it may be challenging to distribute dividends because it is better for the business to reinvest profits in expansion and debt reduction. Actually, there used to be a comparable clause regarding a track record of profitability for listing Indian companies. However, this was later changed; Regulation 6(2) of the ICDR Regulations was made, which permits listing subject to a minimum allocation of 75 percent to QIBs, to assist issuer firms who did not meet the asset/net worth/profit criterion to conduct an initial public offering (IPO). This makes it possible for many new-age and infrastructure companies to list without having a history of success. IDRs can use a comparable listing criterion as well.