Atmanirbhar Bharat could add $160 billion by 2024 to trade earnings

MUMBAI: India's incremental earnings from overseas trade, anchored in potential investments from the likes of Apple Inc. and Foxconn, could surge to $160 billion by 2024, with New Delhi emerging as a feasible alternative to Beijing for manufacturing and other capital-intensive industries in a global de-risking of supply chains.
An internal Citi report on India's Atmanirbhar plan notes opportunities in industries as diverse as manufacturing, services, solar, and chemical industries. The Atmanirbhar plan focuses on enhancing self-reliance in industries that hitherto depended on China for crucial supplies.

Taiwan-based Foxconn, iPhone maker Apple, Sanmina Corporation, Pegatron and Hewlett Packard are among those in discussions with banks studying the feasibility of setting up shop in India.

Individual companies could not be contacted immediately.

"Many global manufacturers look interested in an additional base to China to diversify risk," said K. Balasubramanian, head of corporate banking, Citi South Asia. "When you look at an investment, you aren't looking at it with a few quarters in mind, you are taking an investment decision on a country across multiple themes.”

Citi is making a case for fresh investments into India to global investors. India's share in global exports can go up to 3.4% in 2025 and 6% by 2030, showed a Citi presentation shared with the authorities.

The bank has identified areas in which India has the potential to become a base for global manufacturing, or part of an MNC’s "China plus one" strategy. Export opportunities can arise out of textile and apparel, electrical and mobility, telecom and heavy engineering over the next three years, generating annual flows of over $100 billion.

"Electronics and fabrication manufacturers could well be the first comers through this window," said Balasubramanian.

Heavy engineering and electronics could each account for $50 billion of the potential flows. Telecom, the sector fraught in regulatory tangles, can offer an investment opportunity of up to $20 billion.

"Global corporates would be encouraged by the recent reforms in areas where India was earlier perceived as weak," said Balasubramanian.

New Delhi has been pursuing a series of reforms spanning corporate tax breaks to labour laws, legal system, credit access.

Proposals have been made to streamline 44 labour laws into just four labour codes. A relaxation of state labour laws is also under consideration. The government is also looking into land acquisition policy, a key factor for any institutional investor.

The authorities are dealing with proposals to offer tax breaks to foreign investors, including sovereign funds, simplified GST returns, pre-filing tax returns, abolition of dividend distribution tax.

Balasubramanian said the 'China plus one' strategy can draw in investments of $5 billion in solar, and $10 billion in chemicals.

FDI inflows could increase 16% annually to $25 billion in the next three years and 5.4 million in additional workforce, the presentation showed.

"This is an opportune time for MNCs to set up base in India," Balasubramanian said.