India need to soften FDI rules, rationalise tariff to become an electronics hub

The industry has suggested softening rules to allow investment from India’s neighbouring countries amid shifting of the electronics manufacturing ecosystem to the country as many companies adopt the China+1 strategy.

In 2020, the Department for Promotion of Industry and Internal Trade, in Press Note 3, made prior government approval mandatory for foreign direct investment from countries sharing a land border with India, irrespective of sectoral caps. The aim was to curb opportunistic takeovers of domestic firms after Covid-19.