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.

India’s artificial intelligence (AI) ecosystem is entering a decisive growth phase. With increasing policy focus, expanding digital infrastructure and rising global interest, the country is positioning itself as a key destination for AI-driven investment and innovation.

Recent developments indicate that India could attract significant AI-related investments in the coming years, spanning compute infrastructure, data ecosystems and applied AI solutions. For global investors, Economic Development Boards (EDBs) and Investment Promotion Agencies (IPAs), this marks a turning point in how India is perceived not just as a technology services hub, but as an emerging centre for AI development.

From Services to Innovation Leadership

India’s technology sector has traditionally been associated with IT services and outsourcing. However, the current AI push signals a strategic shift toward innovation ownership.

The focus is now on:

• Building domestic AI capabilities
• Expanding compute infrastructure
• Supporting research and development
• Encouraging AI adoption across industries

This transition reflects a broader ambition to move up the global technology value chain.

Key Drivers of AI Investment in India

Several structural factors are contributing to the rapid growth of India’s AI ecosystem.

Talent scale: India continues to produce one of the largest pools of engineers and data scientists globally, providing a strong foundation for AI development.

Digital public infrastructure: Platforms for identity, payments and data exchange enable large-scale AI deployment across sectors.

Growing data ecosystem: India’s expanding digital economy generates vast amounts of data, essential for training AI models.

Policy support: Government initiatives aimed at boosting AI capabilities are creating a more supportive investment environment.

Together, these factors are making India an increasingly attractive destination for AI investment.

Expanding Opportunities Across Sectors

AI investment in India is not limited to technology companies. Multiple sectors are beginning to integrate AI into their operations, creating new opportunities for investors.

Key areas include:

• Healthcare: Diagnostics, predictive analytics and patient management
• Financial services: Fraud detection, credit assessment and digital banking
• Manufacturing: Automation, quality control and supply chain optimisation
• Agriculture: Precision farming and yield forecasting

This cross-sector adoption enhances the scalability of AI solutions and strengthens the overall investment case.

Implications for Global Partnerships

India’s AI growth is also reshaping international collaboration models. Rather than traditional outsourcing relationships, global firms are increasingly exploring co-development and innovation partnerships.

This includes:

• Joint research initiatives
• Establishment of AI labs and R&D centres
• Collaboration with startups and academic institutions

For EDBs and IPAs, this creates new opportunities to attract high-value investments focused on innovation and capability development.

The IAC Perspective

At the International Advisory Council, we see India’s AI surge as a defining moment in the country’s investment journey. The convergence of talent, infrastructure and policy support is creating a strong foundation for long-term growth.

For global stakeholders, the opportunity lies not just in accessing India’s market, but in participating in its innovation ecosystem.

As the global AI landscape continues to evolve, India is steadily positioning itself as a key partner in shaping the future of technology.

India’s talent pool remains one of its most significant competitive advantages. With a large and growing workforce, particularly in technology and engineering, the country continues to attract global investment.

The availability of skilled professionals enables companies to build large teams quickly and efficiently. This is particularly important for sectors such as IT, engineering, research and digital services.

Education and skill development initiatives are further strengthening this advantage. Increasing focus on advanced technologies such as AI, data science and cybersecurity is preparing the workforce for future demands.

India’s demographic profile also supports long-term growth. A young population ensures a steady supply of talent for years to come.

For global companies, access to talent is often a primary factor in investment decisions. India’s ability to provide both scale and quality makes it a preferred destination.

However, competition for top talent is increasing and companies must invest in training and retention strategies.

At the International Advisory Council, we see talent as the foundation of India’s investment appeal. It is not just a supporting factor it is a strategic asset driving long-term growth.

India’s urbanisation is accelerating, reshaping the country’s economic landscape and creating new investment opportunities. As cities expand and new urban centres emerge, demand for infrastructure, services and housing continues to rise.

This shift is not limited to major metropolitan areas. Tier-2 and tier-3 cities are increasingly becoming important growth hubs, driven by improved connectivity and digital access.

Urbanisation is creating opportunities across multiple sectors:

• Real estate and housing
• Transportation and mobility
• Utilities and infrastructure
• Retail and consumer services

Government initiatives aimed at smart cities and urban development are further supporting this growth.

For investors, emerging cities offer lower costs and untapped potential compared to traditional hubs. However, they also require careful evaluation of infrastructure readiness and policy support.

The decentralisation of economic activity is helping distribute growth more evenly across the country.

At the IAC, we view urbanisation as a long-term structural driver of investment in India, creating new corridors for both domestic and international capital.

India’s financial sector is evolving rapidly, playing a crucial role in supporting economic growth and investment activity. Reforms in banking, capital markets and financial services are strengthening the overall ecosystem.

One of the key developments is increased financial inclusion. Digital banking, fintech innovations and government initiatives have expanded access to financial services across the country.

Capital markets have also matured significantly. Improved regulatory frameworks and increased participation from domestic and foreign investors are enhancing liquidity and market depth.

The recent move to liberalise sectors such as insurance further signals India’s openness to foreign capital. These reforms are expected to attract long-term investment into financial services.

For investors, a strong financial system provides confidence in capital allocation, risk management and exit opportunities.

Fintech is another area of rapid growth. India’s digital infrastructure has enabled the rise of innovative financial solutions, attracting both venture capital and strategic investments.

At the International Advisory Council, we see the financial sector as a key pillar of India’s investment ecosystem, supporting both domestic growth and international capital flows.

India’s transition toward renewable energy is creating one of the largest investment opportunities globally. With ambitious targets for solar, wind and green hydrogen, the country is positioning itself as a key player in the global energy transition.

The scale of opportunity is substantial. India’s growing energy demand, combined with climate commitments, requires significant investment in generation, storage and transmission infrastructure.

Solar and wind energy continue to attract strong investor interest due to falling costs and supportive policy frameworks. At the same time, emerging segments such as green hydrogen and battery storage are opening new avenues for capital deployment.

Government incentives and regulatory support are encouraging both domestic and foreign investment. Long-term power purchase agreements and policy clarity are helping reduce risk for investors.

For global energy companies and infrastructure funds, India offers a combination of scale, policy support and long-term growth visibility.

However, challenges such as land acquisition, grid integration and financing structures require careful planning.

From the IAC perspective, India’s renewable energy sector represents a strategic opportunity for investors seeking long-duration, sustainable returns aligned with global climate goals.