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India’s infrastructure boosts FDI in renewables, telecom: Economic Survey

India’s infrastructure boosts FDI in renewables, telecom: Economic Survey

According to the Economic research 2023-2024India has developed a robust infrastructure to foreign direct investment (FDI) in key sectors including renewable energy, telecommunications, software and hardware, and consulting services. The survey highlights India’s strategic focus on integrating its value chain with Western markets, particularly in emerging sectors such as renewable energy and advanced technologies like artificial intelligence (AI), semiconductors, and next-generation telecommunications.

The Economic Survey highlights the role of international agreements in this integration process, such as the Australia-India Free Trade Agreement and the US-India Clean Energy Initiative. These agreements are crucial in shaping trade patterns and boosting exports. For example, exports of eco-friendly technologies, including solar water heaters, waste recycling equipment and wind turbines, increased significantly from $199.2 million in FY20 to $326.9 million in FY24.

The research also found that several leading US and European companies in the renewable energy sector, including First Solar, Vestas and Scatec, have set up operations in India to capitalise on the growing demand for green technologies.

In telecommunications, India is a major player globally, ranking second in the export of telecommunications, computer and information services. The country ranks sixth in the export of personal, cultural and recreational services, eighth in other business services, tenth in transport services and fourteenth in the export of travel services. This robust performance is supported by a significant increase in telecommunications infrastructure. As of March 2024, the total teledensity, measured as the number of telephones per 100 people, increased to 85.7 percent from 75.2 percent in March 2014. Wireless telephone connections reached 116.5 crore by the end of March 2024.

India is also making strides in 5G technology, with the Bharat 6G Alliance launched in July last year to position India as a global leader in affordable 5G and future telecom solutions. The country currently has one of the fastest growing 5G networks in the world. As of June 2024, there will be 8.02 lakh mobile towers, 29.37 lakh Base Transceiver Stations (BTSs) and 4.5 lakh 5G BTSs across India.

The Economic Survey also notes the impact of the Production Linked Incentive Schemes (PLI)covering 14 major sectors with an outlay of Rs 1.97 lakh crore. These schemes aim to enhance India’s manufacturing capabilities and exports. As of May 2024, the schemes have attracted over Rs 1.28 lakh crore in investments, leading to production and sales of Rs 10.8 lakh crore and creation of over 8.5 lakh direct and indirect jobs. Exports have been boosted by Rs 4 lakh crore, with significant contributions from electronics manufacturing, pharmaceuticals, food processing and telecom and networking products.