UN Report: India Emerges as Key Investment Hub Amid Supply Chain Diversification

According to the United Nations, multinational corporations are recognizing India as an alternative manufacturing hub for supply chains, positioning the nation as a “strong” recipient of foreign investments.

“India is benefiting from growing interest from multinationals, which see the country as an alternative manufacturing base in the context of developed economies’ supply chain diversification strategies,” stated the Financing for Sustainable Development 2024 Report.

The report, released on Tuesday, highlighted that “investment in South Asia, particularly in India, remains strong,” contrasting with challenges faced by other developing countries.

Discussing India’s role as an “alternative manufacturing base,” the report did not directly mention China, which has influenced this development due to geopolitical considerations.

In contrast to India and certain other countries, the report pointed out that the developing world as a whole is grappling with a “sustainable development crisis” driven by “staggering debt burdens and sky-high borrowing costs.”

Deputy Secretary-General Amina J. Mohammed emphasized the urgency, stating, “We are truly at a crossroads, and time is running out. Leaders must go beyond mere rhetoric and deliver on their promises. Without adequate financing, the 2030 (UN sustainable development) targets cannot be met.”

“We’re experiencing a sustainable development crisis, to which inequalities, inflation, debt, conflicts, and climate disasters have all contributed,” Mohammed further remarked during a news conference on the report’s release.

Addressing the need for reforms, Mohammed highlighted that global financial institutions established after World War II are no longer sufficient to address contemporary challenges and require urgent adaptation.

The report highlighted that the New Development Bank (NDB), established by BRICS, plans to issue 30 percent of its loans in national currencies, including Indian rupee-denominated bonds, between 2022 and 2026.

Furthermore, the report stressed the urgency of mobilizing substantial financing to bridge the development financing gap, now estimated at $4.2 trillion annually, up from $2.5 trillion before the COVID-19 pandemic.

Warning against ongoing challenges, the report noted, “Meanwhile, rising geopolitical tensions, climate disasters, and a global cost-of-living crisis have affected billions of people, impeding progress on healthcare, education, and other development targets.”

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