India's manufacturing sector increasingly attractive to global investors: S&P Global

While manufacturing value added accounts for a modest 17.2 per cent of the country's real gross domestic product (GDP), the government has implemented targeted policy interventions to build domestic manufacturing capacity and strengthen India's role in global supply chains.

Beyond the near-term impact, therefore, India can benefit from the increasing trade protectionism, which may catalyse supply-chain diversification, according to the report.

India is poised to maximise opportunities as the global trade and cooperation environment evolves. The country has grown visibly in size, scale and international impact over the past three decades and is on track to become the world's third-largest economy by fiscal 2030-31.

As economies adapt to evolving trade dynamics and tariff challenges, India can capitalise on this momentum for accelerated manufacturing growth and greater global supply-chain integration, said the report titled "India Forward: Transformative Perspectives".

The country is also focusing on alternative energy sources to create a cleaner, self-reliant transport future.

Adoption of biofuels is a part of this push. Biofuels offer a triple-win solution to the country's growing need for sustainable energy sources amid rising environmental concerns -- by addressing energy security, reducing greenhouse gas (GHG) emissions and enhancing income opportunities for the agricultural sector, said the report.

India is also set to pursue a path where energy security meets revenue security. Recent regulatory changes present an opportunity as India looks to enhance crude oil exploration and development to achieve self-sufficiency.

It has moderate dependence on external trade for growth, which cushions it somewhat from ongoing shifts in global trade and tariff policies, though it is not immune to the rising trade protectionism, said the report.