Several leading United States corporations, including Tesla and Apple, are intensifying their efforts to establish a presence in India, as an alternative production hub to China.
The move comes amid ongoing tensions between Washington and Beijing. Tesla CEO Elon Musk recently met with Indian Prime Minister Narendra Modi to discuss the possibility of setting up a factory in India.
Similarly, Micron Technology announced plans to invest $825 million in building a semiconductor assembly and testing facility in the state of Gujarat.
Amazon Web Services also revealed its intention to invest $12.9 billion in India by 2030 to develop new data centres.
The strained US-China relationship has prompted American companies to explore opportunities in India, which has become increasingly important for US businesses.
In 2020, the US accounted for 22 per cent of foreign direct investment in India, making it the second-largest investor after Singapore. India's appeal lies in its large domestic market, with a population that is projected to surpass China's.
The country's per-capita gross domestic product (GDP) is expected to rise, indicating potential growth in consumer spending. Apple has already opened stores in India and aims to increase its production in the country with the support of suppliers like Foxconn.
European and Japanese companies are also boosting their investments in India as they seek to mitigate risks associated with China.
For instance, Suzuki Motor plans to expand its annual manufacturing capacity in India by one million vehicles. These increased foreign investments align with Prime Minister Modi's goal of expanding the manufacturing sector to contribute 25 per cent of India's GDP.
The surge in foreign interest could help India achieve this target and seize the opportunities presented by the evolving global economic landscape.
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