Foreign Investment Policy and the Manufacturing Sector: A Case Study of India

India’s manufacturing sector has undergone a transformative journey, propelled by liberalized foreign direct investment (FDI) policies and strategic initiatives like Make in India. This research article explores the interplay between FDI policies and the manufacturing sector, analyzing trends, sectoral contributions, and economic impacts. Drawing on primary data from the Department for Promotion of Industry and Internal Trade (DPIIT) and supplemented by recent studies, the study reveals a 69% surge in FDI equity inflows in manufacturing from 2014–2024 compared to the previous decade. Key sectors, including automobiles, pharmaceuticals, and electronics, have driven job creation, export growth, and technological advancements. However, challenges such as regulatory complexities, high tariffs, and regional disparities persist. The article offers policy recommendations to enhance India’s position as a global manufacturing hub, emphasizing streamlined regulations and equitable regional development.