Corporate profits have recovered sharply, but investment has lagged. PBIT grew 21.4% in 2023-24, while gross fixed assets rose only 6.1%
Firms invest when the next unit of capital promises attractive returns. Declining marginal profitability can therefore keep even profitable companies from adding capacity
India’s manufacturing potential rests on scale, infrastructure, technology, skills and value addition
Cluster-based industrial parks can lower costs and strengthen supplier linkages
High duties on imported inputs raise domestic production costs and weaken exports. A simpler, lower tariff structure can make Indian manufacturing more competitive
India’s share of global manufacturing value added reached 3.2% in 2023, against China’s nearly 32%. Deeper integration with global value chains is essential for scale
India’s R&D spending remains below 1% of GDP
Durable private investment will require stronger technology capabilities and firms capable of generating sustained commercial returns