FDI Determinants, Make-in-India PLI Scheme Performance and China+1 Manufacturing Relocation in the Indian Industrial Landscape
Author(s): Vivek Sinha, Anjali Mehta
Affiliation: Department of Economics, Shri Ram College of Commerce, University of Delhi, New Delhi, India
Page No: 41-43-
Volume issue & Publishing Year: Volume 3, Issue 4, 2026/04/16
Journal: International Journal of Modern Engineering and Management | IJMEM
ISSN NO: 3048-8230
DOI: https://doi.org/10.5281/zenodo.19764130
Abstract:
India's ambition to become a USD 5 trillion economy by 2027 and a USD 30 trillion economy by 2047 rests critically on its ability to attract and sustain foreign direct investment — particularly in manufacturing, where India's share of global exports remains approximately 1.7% versus China's 14.8%, Vietnam's 4.2%, and Bangladesh's 1.2% for comparable labour-intensive categories. The Production Linked Incentive (PLI) scheme — launched across 14 sectors with a total incentive budget of ₹1.97 lakh crore over five years — represents the most ambitious industrial policy initiative in post-liberalisation India, designed to create globally competitive manufacturing anchors in electronics, pharmaceuticals, automotive, textiles, food processing, and seven other sectors. This study evaluates FDI determinants in India across 2015-2024 using panel gravity model analysis (n=42 source countries), PLI scheme investment realisation and employment generation across seven sectors through 2024, and China+1 manufacturing relocation feasibility through a seven-country benchmarking on cost, quality, infrastructure, and risk dimensions. PLI schemes have attracted ₹3.28 lakh crore in committed investment and created 847,000 direct jobs across seven sectors by FY2024. India's China+1 competitiveness is strongest in Electronics (composite score 84/100), Pharmaceuticals (82/100), and Automotive/EV (78/100), and weakest in low-wage textiles where Bangladesh and Vietnam retain decisive cost advantages. The University of Hamburg collaboration contributes the IB gravity model methodology and comparative FDI determinant analysis from European investment research.
Keywords:
FDI, Make-in-India, PLI scheme, manufacturing, gravity model, industrial policy, India, electronics, pharmaceuticals, automotive, EV, global value chain
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