India’s corporate landscape is undergoing a fundamental structural shift. What began decades ago as a destination for back-office processing and IT support has matured into the primary innovation engine for the global Fortune 500.

Today, India hosts over 2,110 Global Capability Centers (GCCs) operating across more than 3,700 active units. Generating $98.4 billion in market value and employing nearly 2.4 million high-skilled professionals, the GCC ecosystem is no longer a cost-saving experiment – it is a mandatory requirement for enterprise transformation, software engineering, and global capability buildout.

For global investors, cross-border corporate leaders, and international trade bodies, understanding this transition from cost arbitrage to capability integration is essential for long-term capital allocation in Asia Pacific.

1. The Value Shift: From Shared Services to Core R&D and AI

The foundational metric driving foreign direct investment (FDI) into Indian GCCs has changed. Where multinational corporations previously evaluated setups on labor arbitrage, modern investment decisions are anchored in product design ownership, proprietary AI development, and enterprise-level risk management.

• Product & Platform Ownership: Over half of all technology and industrial engineering GCCs in India now hold complete ownership of global product architecture. Chipmakers, retail conglomerates, and automotive leaders are directing core engineering initiatives out of hubs in Bengaluru, Hyderabad, and Pune.
• Centers of Excellence (CoEs) in AI & Analytics: Rather than deploying standard automated tools, GCCs house over 250,000 specialized AI/ML engineers developing proprietary Generative AI models, supply chain digital twins, and algorithmic trading systems for parent headquarters.
• High-Value Executive Talent: The nature of local talent acquisition has elevated. Roles in enterprise architecture, cybersecurity, and global strategic sourcing now command high-tier compensation structures and direct C-suite alignment.

 2. Regional Diversification: The Ascent of Tier-2 Hubs

While primary technology hubs—Bengaluru, Hyderabad, and the National Capital Region (NCR)—continue to host the majority of enterprise setups, operational costs and talent density are fueling an expansion into Tier-2 growth markets.

Emerging regional centers such as Coimbatore, Kochi, Vadodara, Ahmedabad, and Bhubaneswar are securing significant net-new setup commitments.

Hub Classification	Key Cities	Operational & Strategic Advantages	Primary Industry Focus
Tier-1 Established	Bengaluru, Hyderabad, Pune, NCR, Chennai, Mumbai	Deep mature leadership pools, dense ecosystem, immediate cloud infrastructure	Advanced AI, FinTech, Semiconductor Design, Cloud Ops
Tier-2 High-Growth	Coimbatore, Kochi, Ahmedabad, Vadodara, Jaipur	20 pct to 30 pct fully loaded cost savings, lower talent attrition, targeted state incentives	Industrial IoT, Healthcare Analytics, Embedded Software, Shared Operations

State governments across India are actively competing for this high-value corporate footprint by introducing dedicated GCC policy frameworks, land subsidies, power concessions, and single-window regulatory clearances.

3. Key Regulatory & Structural Considerations for Foreign Entrants

While the economic thesis for building or expanding a GCC footprint in India remains compelling, navigating local operational and regulatory execution requires structured planning:

• Transfer Pricing & Corporate Structuring: Choosing between a direct captive entity and a hybrid model (such as Build-Operate-Transfer via a local partner) carries distinct tax implications under Indian transfer pricing laws. Maintaining OECD-compliant arms-length documentation is essential.
• Data Governance & DPDP Compliance: Under India’s Digital Personal Data Protection (DPDP) regulatory framework, GCCs cross-sharing employee, consumer, or operational data with parent global headquarters must maintain strict local compliance protocols and data localization policies.
• Infrastructure & Power Reliability: High-performance computing labs and advanced R&D centers require uninterrupted power grids and Grade-A real estate. Negotiating green energy open-access agreements is increasingly central to meeting the ESG mandates of global parent entities.

The IAC Perspective

At the International Advisory Council (IAC), we view the evolution of Global Capability Centers as a defining pillar of India’s long-term integration into the global economy. A GCC is no longer an isolated operational delivery unit—it is a strategic asset that directly expands the enterprise value of the parent firm.

For international companies evaluating initial market entry or scaling existing setups, execution extends beyond real estate acquisition or basic talent recruitment. A resilient market-entry strategy must align site selection, regulatory structuring, tax compliance, IP protection, and regional supply chain integration.

As capital flows into digital infrastructure and advanced innovation, global firms that build integrated, capability-first centers in India will secure a lasting operational advantage in an increasingly competitive global economy.

India’s rise as the second-largest data centre market in the Asia Pacific region marks a major milestone in the country’s digital transformation journey. As demand for cloud computing, artificial intelligence, digital services and data storage accelerates globally, India is positioning itself as a critical hub for next-generation digital infrastructure.

For global investors, Economic Development Boards (EDBs) and Investment Promotion Agencies (IPAs), this development highlights the growing strategic importance of India’s digital ecosystem and its expanding role in the global technology economy.

A Rapidly Expanding Digital Infrastructure Ecosystem

India’s data centre market has grown significantly over the past few years, driven by rising internet penetration, widespread smartphone adoption and the rapid digitisation of businesses and public services.

The increasing use of:

• Cloud computing
• Artificial intelligence applications
• Streaming platforms
• E-commerce and fintech services

has created unprecedented demand for large-scale data processing and storage infrastructure.

As a result, India is witnessing strong investment momentum in hyperscale data centres, cloud infrastructure and digital connectivity networks.

AI and Cloud Demand Driving Growth

One of the biggest drivers of this expansion is the rise of artificial intelligence. AI systems require massive computing power, high-speed processing and scalable storage capabilities — all of which depend heavily on advanced data centre infrastructure.

India’s ambitions in AI development are therefore closely tied to the growth of its data infrastructure ecosystem.

At the same time, enterprises across sectors are accelerating cloud adoption to improve efficiency, scalability and digital resilience. This is creating sustained long-term demand for data centre capacity.

For investors, the convergence of AI, cloud computing and digital services presents a significant opportunity for infrastructure-led growth.

Why India Is Emerging as a Key Data Centre Hub

Several structural advantages are strengthening India’s position in the Asia Pacific digital infrastructure landscape.

Large Digital User Base

India has one of the world’s largest and fastest-growing internet user populations, generating substantial data demand.

Strategic Geographic Position

India’s location provides connectivity advantages between Asia, the Middle East, Europe and Africa, making it an attractive regional data hub.

Policy and State-Level Support

Both central and state governments are introducing policies and incentives to attract data centre investments, including infrastructure support and streamlined approvals.

Renewable Energy Potential

Growing renewable energy capacity is also helping support sustainable data centre operations — an increasingly important factor for global technology companies.

Broader Economic Impact

The growth of India’s data centre ecosystem extends beyond technology infrastructure alone. It is expected to create opportunities across multiple allied industries, including:

• Power and energy systems
• Cooling technologies
• Semiconductor and server manufacturing
• Cybersecurity and digital services

In addition, the sector is likely to generate high-skilled employment in areas such as cloud operations, AI engineering and data analytics.

This ecosystem-driven growth is strengthening India’s position as a long-term digital investment destination.

Challenges and Execution Priorities

Despite strong momentum, continued growth will depend on addressing key operational challenges, including:

• Reliable power supply
• Land and infrastructure availability
• Data security and regulatory clarity
• Connectivity and subsea cable expansion

States that can offer integrated digital infrastructure ecosystems are likely to emerge as major investment hubs.

The IAC Perspective

At the International Advisory Council, we see India’s emergence as a leading data centre market as a defining development in the country’s digital economy story.

The combination of scale, digital adoption, AI ambitions and infrastructure investment is creating a powerful platform for long-term growth.

For global stakeholders, the opportunity lies not only in accessing India’s market, but in participating in the infrastructure that will power the next phase of the global digital economy.

As technology-driven industries continue to expand, India’s role as a regional digital infrastructure hub is set to become increasingly significant.

Global pharmaceutical leader Novartis is expanding its presence in India, reinforcing the country’s growing role in global drug development. This move reflects a broader shift: India is no longer viewed solely as a cost-efficient manufacturing base, but as a strategic hub for research, innovation and advanced clinical operations.

For international stakeholders, this is not just expansion it is a clear signal of where India is positioned in the global pharmaceutical value chain.

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Why This Matters

1. India as a Global R&D and Innovation Hub

India’s deep talent pool in life sciences, data science and artificial intelligence is enabling multinational companies to scale complex research functions. Companies like Novartis are leveraging India for AI-enabled drug discovery, data-driven research and integrated development capabilities, accelerating innovation timelines.

2. Strengthening Clinical and Operational Capabilities

India is becoming a preferred destination for end-to-end clinical operations, supported by improving infrastructure, regulatory evolution and cost-quality balance. This allows global firms to manage larger portions of the drug development lifecycle within a single geography.

3. From Cost Advantage to Capability Advantage

The narrative around India’s pharmaceutical sector is shifting. While cost efficiency remains relevant, the real differentiator is now capability, quality and scalability critical for companies integrating India into global innovation pipelines.

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The Role of AI in Drug Development

A defining feature of this expansion is the integration of artificial intelligence into pharmaceutical workflows. AI is enabling:

• Faster molecule identification and validation
• More efficient clinical trial design
• Advanced data analytics for improved patient outcomes

India’s strength in technology and analytics creates a unique convergence of biomedical research and digital innovation, positioning it as a competitive advantage for global pharmaceutical companies.

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Implications for Global Investors and Institutions

The expansion of Novartis highlights several strategic opportunities:

• For global pharmaceutical companies: India offers a scalable base for R&D, clinical development and innovation-led growth
• For Economic Development Boards (EDBs) and Investment Promotion Agencies (IPAs): India-linked partnerships can attract high-value investments in life sciences and biotech
• For international institutions: India presents opportunities for collaboration across research, talent development and healthcare innovation

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A Broader Industry Signal

This development reflects a wider transformation in India’s pharmaceutical ecosystem, including:

• Growth of Global Capability Centres (GCCs)
• Increased investment in biotech and life sciences
• Stronger collaboration between industry, academia and technology

As more multinational firms expand their presence, India’s role in the global healthcare ecosystem is set to deepen further.

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Conclusion: India as a Strategic Partner in Global Healthcare

The expansion of Novartis underscores a structural shift. India is not just participating in global pharmaceutical manufacturing it is increasingly shaping innovation, research and development outcomes.

For global stakeholders, the message is clear:

India is no longer just a market to enter.
It is a strategic partner in the future of global healthcare innovation.

India’s trade relationship with Kenya is gaining strong momentum, with bilateral trade growing by nearly 25% to reach US$ 4.31 billion in FY26. This development reflects a broader shift in global trade dynamics, where emerging economies are deepening economic ties and building new growth corridors beyond traditional markets.

For global investors, Economic Development Boards (EDBs) and Investment Promotion Agencies (IPAs), the strengthening India–Kenya partnership offers valuable insight into the evolving landscape of South–South trade and investment collaboration.

A Strengthening Bilateral Trade Relationship

India and Kenya have maintained a long-standing economic relationship, supported by historical ties, shared development priorities and increasing business engagement. The recent growth in trade highlights the expanding scope of this partnership across multiple sectors.

Key areas of trade include:

• Pharmaceuticals and healthcare products
• Machinery and engineering goods
• Petroleum and energy-related products
• Agricultural commodities

This diversified trade profile reflects complementary economic strengths, enabling both countries to benefit from increased exchange.

Africa’s Growing Importance in India’s Trade Strategy

The rise in India–Kenya trade is part of a larger trend of India strengthening its engagement with Africa. As one of East Africa’s most dynamic economies, Kenya serves as a gateway to the broader African market.

India’s engagement with the region is driven by several factors:

• Expanding export opportunities
• Access to emerging consumer markets
• Strategic partnerships in infrastructure and development
• Increasing collaboration in technology and services

For Indian companies, Africa represents a key growth frontier, while for African economies, India offers expertise, investment and technology.

Opportunities for Investment and Collaboration

The growth in trade is also creating opportunities for deeper investment collaboration between India and Kenya.

Potential areas of investment include:

• Infrastructure development and logistics
• Renewable energy and power projects
• Digital services and fintech
• Agriculture and food processing

As trade volumes increase, investment flows are likely to follow, strengthening economic integration between the two countries.

For IPAs and EDBs, this trend highlights the importance of facilitating cross-border partnerships and supporting companies exploring new markets.

Strategic Implications for Global Stakeholders

The expansion of India–Kenya trade reflects a broader rebalancing of global economic relationships. As emerging markets deepen ties with each other, new trade corridors are being established that are less dependent on traditional developed markets.

This shift has several implications:

• Greater diversification of global trade flows
• Increased resilience in supply chains
• New opportunities for investment in emerging regions

For global investors, understanding these evolving dynamics is essential for identifying future growth opportunities.

The IAC Perspective

At the International Advisory Council, we see the growth of India–Kenya trade as part of a larger trend toward multi-polar economic engagement.

As India continues to expand its global footprint, partnerships with emerging markets such as Kenya will play a critical role in shaping its trade and investment strategy.

For investors and policymakers, the opportunity lies in recognising and aligning with these new economic corridors where growth is increasingly being driven by collaboration between developing economies.

The India–Kenya partnership demonstrates how trade, investment and strategic cooperation can come together to create sustainable, long-term economic value.

India’s digital infrastructure ambitions are accelerating, with Andhra Pradesh emerging as a key player in the country’s next phase of technology-led growth. The development of a large-scale AI and data infrastructure ecosystem across locations such as Tharluwada, Adavivaram and Rambilli signals a strategic push toward building globally competitive digital capabilities.

Supported by the state’s proactive “speed of doing business” policy, this initiative reflects a broader shift in India’s investment narrative — from digital adoption to digital infrastructure leadership.

Building a Next-Generation Digital Ecosystem

The proposed AI hub in Andhra Pradesh is designed to strengthen India’s position in high-growth sectors such as artificial intelligence, cloud computing and data storage. By enabling large-scale AI cloud infrastructure, the project aims to support both domestic innovation and global digital operations.

This development comes at a time when demand for data processing and AI capabilities is rising rapidly across industries. From financial services and healthcare to manufacturing and logistics, organisations are increasingly reliant on advanced digital infrastructure to remain competitive.

By investing in large-scale data centres and AI platforms, Andhra Pradesh is positioning itself to meet this growing demand while attracting global technology investments.

Global Connectivity as a Strategic Advantage

A key differentiator of the project is its focus on international connectivity. Planned subsea cable infrastructure will link Visakhapatnam directly to major global regions, including the United States, Europe, the Middle East, Africa and Australia.

This connectivity is critical for several reasons:

• It reduces data latency for global operations
• Enhances reliability and speed of digital services
• Strengthens India’s integration into global data networks

For multinational companies, such infrastructure significantly improves the feasibility of operating large-scale digital platforms from India.

Employment and Ecosystem Development

Beyond infrastructure, the AI hub is expected to generate substantial employment opportunities across multiple domains, including:

• Artificial intelligence and machine learning
• Cloud computing and data engineering
• Cybersecurity
• Advanced analytics

In addition, the project is likely to stimulate growth in allied industries such as power systems, cooling technologies and server manufacturing. This ecosystem-driven approach ensures that the benefits extend beyond core technology sectors.

The development of such integrated ecosystems is increasingly becoming a key factor in attracting long-term investment.

Scale and Long-Term Vision

The Andhra Pradesh government has outlined an ambitious plan to develop a multi-gigawatt digital ecosystem, targeting a capacity of 6.5 gigawatts. This scale reflects a long-term commitment to building infrastructure that can support sustained growth in digital services and emerging technologies.

Such large-scale capacity is essential for positioning India as a global hub for AI and data infrastructure. It also aligns with broader national ambitions to strengthen digital capabilities and reduce dependence on external infrastructure.

Implications for Global Investors

For global investors, Economic Development Boards (EDBs) and Investment Promotion Agencies (IPAs), this development highlights several key trends:

• India’s growing focus on digital infrastructure as a strategic priority
• Increasing state-level competition to attract high-value technology investments
• Rising importance of connectivity and ecosystem readiness in investment decisions

Projects of this scale indicate that India is not only participating in the global digital economy but actively shaping its future.

The IAC Perspective

At the International Advisory Council, we see Andhra Pradesh’s AI hub initiative as a strong example of India’s evolving investment landscape. The convergence of infrastructure, policy support and global connectivity is creating new opportunities for high-value investment.

As demand for AI and data capabilities continues to grow worldwide, India’s ability to build and scale digital infrastructure will play a defining role in its global positioning.

For investors and strategic partners, the opportunity lies in engaging early with these emerging ecosystems — where scale, technology and policy alignment are coming together to drive the next phase of growth.

India’s global engagement strategy is increasingly being shaped not only by policy and trade agreements, but also by the growing influence of its diaspora. During a recent interaction in Berlin, Defence Minister Rajnath Singh highlighted the critical role of the Indian community in Germany as a “living bridge” between the two nations, reinforcing the importance of people-to-people connections in strengthening bilateral ties.

This development comes at a significant moment, as 2026 marks 75 years of diplomatic relations between India and Germany, reflecting a long-standing partnership built on shared democratic values, trust and economic cooperation.

Diaspora as a Strategic Connector

India’s diaspora in Germany estimated at nearly 300,000 individuals is contributing across sectors such as business, technology, healthcare, academia and the arts.

Rather than being seen only as a cultural link, this community is increasingly viewed as a strategic economic and diplomatic asset. Their role extends beyond remittances or cultural exchange to actively shaping trade relationships, facilitating business partnerships and influencing global perceptions of India.

During the interaction, the diaspora was encouraged to continue strengthening economic and strategic engagement while staying connected to their cultural roots highlighting a dual role as both global professionals and national ambassadors.

Reinforcing Economic and Strategic Engagement

The interaction also reflects a broader shift in India’s global positioning. As India’s economic growth accelerates and its technological capabilities expand, its voice in international forums is gaining prominence.

This growing influence is supported by:

• Rapid advancements in infrastructure and digital ecosystems
• Expansion of startup and innovation sectors
• Increasing participation in global trade and strategic partnerships

The diaspora plays a key role in amplifying these strengths globally, acting as a conduit for knowledge transfer, investment and collaboration.

Alignment with India’s Economic Vision

The emphasis on diaspora engagement aligns closely with India’s broader economic strategy, including initiatives such as Aatmanirbhar Bharat, which focuses on strengthening domestic manufacturing and reducing import dependence.

By leveraging global networks, India is not only enhancing domestic capabilities but also positioning itself as a collaborative partner in international value chains.

For countries like Germany India’s largest trading partner in Europe this creates opportunities for deeper cooperation across sectors such as manufacturing, technology and innovation.

Implications for Global Stakeholders

For investors, Economic Development Boards (EDBs) and Investment Promotion Agencies (IPAs), the growing role of the diaspora offers several insights:

• Stronger market entry pathways: Diaspora networks can facilitate partnerships and reduce entry barriers
• Enhanced trust and credibility: Cultural and professional connections improve business confidence
• Accelerated collaboration: Cross-border talent enables faster knowledge exchange and innovation

In an increasingly interconnected global economy, diaspora-driven engagement is becoming a key enabler of international investment flows.

The IAC Perspective

At the International Advisory Council, we see diaspora engagement as a critical but often underutilised lever in global investment strategy.

India’s approach demonstrates how people-to-people connections can complement policy frameworks, creating a more holistic model of international collaboration.

As India continues to strengthen its global partnerships, the role of its diaspora will remain central not just as a community abroad, but as a strategic force shaping trade, investment and innovation.

India’s investment landscape is undergoing a structural shift. While foreign direct investment (FDI) continues to flow into manufacturing and infrastructure, a different model is gaining momentum Global Capability Centres (GCCs).

In 2026, GCC investments are increasingly outpacing traditional FDI in both scale and strategic importance. For global investors, Economic Development Boards (EDBs)and Investment Promotion Agencies (IPAs), this shift reflects a deeper transformation in how companies engage with the Indian market.

A Shift in Investment Intent

Traditional FDI into India has largely focused on physical assets factories, production units and infrastructure. GCCs, by contrast, represent capability-driven investment.

These centres are not designed for cost savings alone. They are built to handle core business functions such as:

• Product engineering and R&D
• Artificial intelligence and data analytics
• Cybersecurity and cloud operations
• Global finance and risk management

This shift indicates that companies are no longer just investing in India they are building from India.

Why GCCs Are Scaling Faster

Several structural factors are driving the rapid expansion of GCCs.

Talent depth at scale: India offers one of the largest pools of skilled professionals globally, particularly in technology and engineering.

Cost-to-value advantage: Companies are able to access high-quality talent at competitive costs, enabling both efficiency and innovation.

Digital readiness: Strong digital infrastructure supports complex, high-value operations.

Global operating model changes: Companies are consolidating functions into fewer, larger hubs to improve resilience and efficiency.

As a result, GCCs are becoming central to global business strategies rather than peripheral support units.

Strategic Advantages Over Traditional FDI

GCC investments offer distinct advantages compared to traditional manufacturing-led FDI.

First, they are less capital-intensive but generate high value through intellectual and digital outputs.

Second, they are more scalable, allowing companies to expand operations quickly based on demand.

Third, they are less dependent on physical infrastructure constraints, reducing entry barriers.

Finally, GCCs create long-term strategic integration, embedding India into core global operations rather than treating it as a standalone market.

Implications for Investment Promotion

For IPAs and EDBs, this shift requires a rethinking of investment promotion strategies.

Attracting GCC investments is not just about offering incentives it requires:

• Access to talent ecosystems
• Strong digital infrastructure
• Policy clarity and ease of operations
• Support for long-term capability building

This represents a move from asset-based investment attraction to capability-based engagement.

The Broader Economic Impact

The growth of GCCs is also reshaping India’s economic structure. These centres contribute to high-value job creation, innovation and knowledge transfer.

They are also driving the development of local ecosystems, including startups, service providers and research institutions.

Over time, this will strengthen India’s position as a global hub for innovation and advanced services.

The IAC Perspective

At the International Advisory Council, we see GCC expansion as one of the most significant shifts in India’s investment story.

While traditional FDI will continue to play an important role, the future of investment in India is increasingly capability-led, technology-driven and integrated into global operations.

For global stakeholders, the message is clear: India is no longer just a destination for capital deployment it is becoming a platform for global capability creation.

Those who recognise and align with this shift early will be best positioned to capture long-term value.

India’s investment story has long been built on scale, cost competitiveness and market potential. However, in 2026, a more subtle but powerful shift is taking place. Increasingly, global investors are evaluating India not just on opportunity but on how quickly that opportunity can be executed.

Execution speed is emerging as a critical differentiator in investment decisions and India is beginning to gain ground in this area.

For global investors, Economic Development Boards (EDBs) and Investment Promotion Agencies (IPAs), this shift has important strategic implications.

From Policy to Implementation

India has made significant progress in policy reforms over the past decade. However, what is now attracting investor attention is the transition from policy announcements to on-ground implementation.

Digital governance systems, single-window clearance mechanisms and improved inter-agency coordination are helping reduce delays that historically affected project timelines.

Investors are increasingly asking practical questions:

• How fast can approvals be secured?
• How quickly can operations begin?
• How predictable are timelines across states?

The answers to these questions are becoming just as important as the incentives offered.

Competitive Federalism Driving Speed

One of the key drivers of improved execution is the rise of competitive federalism. Indian states are actively competing to attract investment, leading to faster approvals, better facilitation and more proactive engagement with investors.

States are:

• Streamlining regulatory processes
• Offering plug-and-play infrastructure
• Establishing dedicated investment facilitation teams
• Reducing time-to-market for projects

This competition is creating a more dynamic and responsive investment environment.

Digital Infrastructure Reducing Friction

India’s expanding digital public infrastructure is also contributing to faster execution. Online compliance systems, digital documentation and integrated platforms are simplifying processes for businesses.

This reduces administrative friction and enables companies to:

• Onboard faster
• Manage compliance more efficiently
• Scale operations with greater ease

For multinational firms, this digital backbone improves operational predictability a key factor in investment planning.

Why Speed Matters More Than Ever

In today’s global environment, speed is directly linked to competitiveness. Companies operating in fast-moving sectors such as electronics, digital services and manufacturing cannot afford prolonged delays.

Faster execution leads to:

• Quicker market entry
• Faster revenue generation
• Improved return on investment
• Greater flexibility in scaling operations

As supply chains evolve and competition intensifies, countries that can offer speed alongside scale will have a clear advantage.

The Remaining Gaps

While progress is evident, execution speed still varies across regions and sectors. Differences in infrastructure readiness, regulatory processes and local governance can impact timelines.

Investors must therefore approach India with a location-specific strategy, selecting states and regions that align with their operational requirements.

Continued focus on consistency and standardisation will be key to sustaining momentum.

The IAC Perspective

At the International Advisory Council, we see execution speed as an increasingly important component of India’s investment value proposition.

The country’s ability to combine scale, talent and improving execution efficiency is creating a more competitive investment environment.

For global stakeholders, the opportunity lies in recognising this shift early. India is no longer just a market of potential it is becoming a market of accelerating execution.

Those who align with this reality will be better positioned to capture the next phase of growth.

India is preparing to enter the next phase of its manufacturing strategy with the proposed rollout of Production-Linked Incentive (PLI) 2.0 schemes, particularly focused on strengthening its position in global electronics manufacturing.

This move signals a shift from initial capacity-building efforts toward scale, competitiveness and deeper integration into global value chains. For global investors, Economic Development Boards (EDBs) and Investment Promotion Agencies (IPAs), PLI 2.0 represents a significant development in India’s industrial policy landscape.

From Incentives to Scale

The first phase of PLI schemes successfully attracted major investments into sectors such as mobile manufacturing and electronics assembly. India has already emerged as a key production base for global smartphone manufacturers, with increasing export volumes.

PLI 2.0 aims to build on this foundation by addressing the next level of challenges moving beyond assembly to higher-value manufacturing and component ecosystems.

The focus is expected to include:

• Deepening domestic value addition
• Expanding component manufacturing
• Strengthening supply chain resilience
• Enhancing export competitiveness

This reflects a clear policy intent to transition from “Make in India” to “Make for the World.”

Strengthening India’s Role in Global Supply Chains

Global electronics supply chains are undergoing structural shifts, driven by geopolitical factors and the need for diversification. Companies are actively seeking alternative manufacturing destinations that can offer both scale and stability.

India’s PLI 2.0 framework aligns with this shift by creating a more attractive environment for global firms looking to expand their manufacturing footprint.

Key advantages include:

• Large domestic demand supporting production scale
• Policy-backed incentives improving cost competitiveness
• Growing ecosystem of suppliers and ancillary industries
• Increasing export orientation

As a result, India is positioning itself not just as an alternative, but as a strategic manufacturing hub.

Opportunities Across the Electronics Value Chain

PLI 2.0 is expected to unlock opportunities across multiple segments within the electronics sector.

These include:

• Semiconductor components and packaging
• Display technologies
• Battery systems and storage solutions
• Telecom and networking equipment

Importantly, the focus on component manufacturing is critical. Reducing dependence on imports will strengthen domestic supply chains and improve long-term sustainability.

For investors, this creates opportunities not only in final product manufacturing but also in upstream and supporting industries.

Execution Will Be Key

While the policy direction is clear, successful implementation will remain crucial. Investors will continue to evaluate:

• Infrastructure readiness across states
• Availability of skilled workforce
• Ease of regulatory approvals
• Logistics and export efficiency

States that align quickly with PLI 2.0 objectives are likely to attract a significant share of investment.

The IAC Perspective

At the International Advisory Council, we see PLI 2.0 as a natural progression in India’s manufacturing strategy. The shift toward deeper value creation and ecosystem development reflects a more mature and strategic approach to industrial growth.

For global investors, the opportunity lies in engaging early with this next phase particularly in high-value segments of the electronics supply chain.

As global manufacturing continues to rebalance, India’s ability to combine policy support, market scale and ecosystem development will play a defining role in shaping its position in the global electronics industry.

India’s PLI 2.0 Push: What It Means for Global Electronics Manufacturing Investment

India is preparing to enter the next phase of its manufacturing strategy with the proposed rollout of Production-Linked Incentive (PLI) 2.0 schemes, particularly focused on strengthening its position in global electronics manufacturing.

This move signals a shift from initial capacity-building efforts toward scale, competitiveness and deeper integration into global value chains. For global investors, Economic Development Boards (EDBs) and Investment Promotion Agencies (IPAs), PLI 2.0 represents a significant development in India’s industrial policy landscape.

From Incentives to Scale

The first phase of PLI schemes successfully attracted major investments into sectors such as mobile manufacturing and electronics assembly. India has already emerged as a key production base for global smartphone manufacturers, with increasing export volumes.

PLI 2.0 aims to build on this foundation by addressing the next level of challenges moving beyond assembly to higher-value manufacturing and component ecosystems.

The focus is expected to include:

• Deepening domestic value addition
• Expanding component manufacturing
• Strengthening supply chain resilience
• Enhancing export competitiveness

This reflects a clear policy intent to transition from “Make in India” to “Make for the World.”

Strengthening India’s Role in Global Supply Chains

Global electronics supply chains are undergoing structural shifts, driven by geopolitical factors and the need for diversification. Companies are actively seeking alternative manufacturing destinations that can offer both scale and stability.

India’s PLI 2.0 framework aligns with this shift by creating a more attractive environment for global firms looking to expand their manufacturing footprint.

Key advantages include:

• Large domestic demand supporting production scale
• Policy-backed incentives improving cost competitiveness
• Growing ecosystem of suppliers and ancillary industries
• Increasing export orientation

As a result, India is positioning itself not just as an alternative, but as a strategic manufacturing hub.

Opportunities Across the Electronics Value Chain

PLI 2.0 is expected to unlock opportunities across multiple segments within the electronics sector.

These include:

• Semiconductor components and packaging
• Display technologies
• Battery systems and storage solutions
• Telecom and networking equipment

Importantly, the focus on component manufacturing is critical. Reducing dependence on imports will strengthen domestic supply chains and improve long-term sustainability.

For investors, this creates opportunities not only in final product manufacturing but also in upstream and supporting industries.

Execution Will Be Key

While the policy direction is clear, successful implementation will remain crucial. Investors will continue to evaluate:

• Infrastructure readiness across states
• Availability of skilled workforce
• Ease of regulatory approvals
• Logistics and export efficiency

States that align quickly with PLI 2.0 objectives are likely to attract a significant share of investment.

The IAC Perspective

At the International Advisory Council, we see PLI 2.0 as a natural progression in India’s manufacturing strategy. The shift toward deeper value creation and ecosystem development reflects a more mature and strategic approach to industrial growth.

For global investors, the opportunity lies in engaging early with this next phase particularly in high-value segments of the electronics supply chain.

As global manufacturing continues to rebalance, India’s ability to combine policy support, market scale and ecosystem development will play a defining role in shaping its position in the global electronics industry.

India is entering a new phase in its manufacturing journey, marked by the rapid development of industrial parks and a strong push toward semiconductor investments. These recent developments signal a clear shift from incremental growth to large-scale, ecosystem-driven industrial expansion.

For global investors, Economic Development Boards (EDBs), and Investment Promotion Agencies (IPAs), this evolution highlights India’s growing ambition to position itself as a central player in global manufacturing and technology value chains.

A New Phase of Industrial Infrastructure Development

The approval of multiple industrial parks across India reflects a deliberate strategy to strengthen manufacturing capabilities at scale. These parks are being designed as integrated ecosystems, offering plug-and-play infrastructure, improved connectivity, and streamlined regulatory processes.

The objective is not only to attract investment but also to reduce execution timelines — a critical factor for global companies evaluating new markets. By clustering industries within dedicated zones, India is creating environments where supply chains, logistics, and workforce availability are aligned.

State governments are playing an active role in this transformation. Several regions are competing to attract sector-specific investments, particularly in pharmaceuticals, electronics, and advanced manufacturing. This decentralised approach is expanding India’s industrial footprint beyond traditional hubs.

Semiconductor Push Signals Strategic Intent

Alongside industrial parks, India’s semiconductor strategy is gaining momentum. With increasing approvals for semiconductor fabrication, assembly, and packaging facilities, the country is taking concrete steps toward building domestic capabilities in a critical global industry.

This push is particularly significant in the context of global supply chain realignment. Semiconductor shortages in recent years have highlighted the risks of concentrated production, prompting countries to diversify their sourcing strategies.

India’s entry into this space is supported by policy incentives, international collaborations, and growing investor interest. The development of semiconductor clusters is expected to attract ancillary industries, creating a broader ecosystem around electronics manufacturing.

Moving Toward Integrated Manufacturing Ecosystems

What sets this phase apart is the emphasis on integration. India is not just building standalone industrial units; it is developing end-to-end manufacturing ecosystems.

These ecosystems combine:

• Industrial infrastructure
• Supply chain networks
• Skilled workforce availability
• Policy support and incentives

This approach enhances efficiency and scalability, making it easier for companies to establish and expand operations.

For investors, this reduces the complexity traditionally associated with entering emerging markets.

Implications for Global Investment Strategy

The expansion of industrial parks and semiconductor investments has several implications for global stakeholders.

First, India is strengthening its position as a viable alternative in global supply chains, particularly in the context of diversification strategies.

Second, the focus on semiconductors reflects a move toward high-value manufacturing, aligning with global demand for advanced technologies.

Third, improved infrastructure and policy alignment are addressing long-standing concerns around execution and operational efficiency.

However, success will continue to depend on effective implementation at the state level, including land availability, logistics readiness, and regulatory consistency.

The IAC Perspective

At the International Advisory Council, we see these developments as a pivotal moment in India’s industrial evolution. The combination of infrastructure expansion and strategic sector focus is creating a strong foundation for long-term investment.

India’s manufacturing story is no longer defined solely by cost advantages. It is increasingly shaped by capability, scale, and integration.

For global investors, the opportunity lies in aligning with this transformation early — leveraging India not just as a market, but as a key node in global production and innovation networks.