Industry leaders warn that these measures, intended as safeguards, are now impeding the growth of India's electronics sector. They assert that the Production Linked Incentive (PLI) scheme, introduced in 2020 to encourage large-scale manufacturing by offsetting cost disadvantages, may no longer suffice due to the "tariff-induced cost" affecting competitiveness against countries like China and Vietnam.

The CII and Indian High Commission report revealed Maharashtra, Karnataka, and Delhi as top contributors of FDI to the UK, emphasising Indian companies' positive impact on the economy, job creation, and cultural diversity, while also highlighting India's position as the UK's second-largest source market.

FDI equity inflows in India fell by 3.49% to USD 44.42 billion in 2023-24, yet experienced a 33.4% rise to USD 12.38 billion in January-March FY24 compared to the previous year.

The total FDI, which includes equity inflows, reinvested earnings and other capital declined by about 7 per cent to USD 51.5 billion during the period under review against USD 55.27 billion in April-December 2022, the data from DPIIT revealed.

The Ministry of Commerce and Industry stated that, "The increased private sector involvement will stimulate job creation, facilitate technology transfer, and fortify India's position in the global space economy, It is anticipated that the policy reforms will incentivize companies to establish manufacturing facilities within the country, aligning with the government's 'Make In India' and 'Atmanirbhar Bharat' initiatives"