New Delhi

India’s domestic manufacturing sector is set to receive stronger external support in the upcoming months as investment in the sector to rise.

According to the monthly economic review by the Ministry of Finance, a growing number of organizations in the US and Europe are focusing on reindustrialization. These organizations are primarily aiming to enhance supply chain resilience, a strategy that could significantly benefit India’s manufacturing firms as part of the China Plus One strategy.

The Ministry of Finance monthly review says that the approach of western economies involves diversifying supply chains to reduce dependence on China by incorporating other countries, with India being a prime candidate for such diversification.

India’s modestly improved economic activity and consumer sentiment in Europe and a steady US economy have increased India’s exports in April. According to the Ministry of commerce data, India’s exports, including merchandise and services, increased from USD 60.40 billion to USD 64.56 billion (Y-o-Y) in April.

The monthly review also highlights that both the industrial and service sectors of the Indian economy are performing well, driven by robust domestic demand and supported by tentative external demand. This positive trend is expected to continue as global economic conditions improve.

The EXIM Bank of India has forecasted that merchandise exports will achieve double-digit growth in the first quarter of FY25, further signalling strong prospects for India’s manufacturing sector. This optimistic outlook is fueled by increased investments and the strategic shifts in global supply chains favoring India.