Indian Prime Minister Narendra Modi plans a raft of business-friendly measures if he wins a third term this week, including pushing through regulations making it easier to hire and fire workers, according to two government officials familiar with the matter.
As part of an election pledge to transform India into a global manufacturing hub, Modi wants to offer subsidies for domestic production modelled on recent packages for semiconductor firms and electric vehicle makers, said the officials, who spoke on condition of anonymity because they were not authorised to talk to media.
The government also plans to reduce import taxes on key inputs for locally-made goods, which have pushed up India's manufacturing costs, the officials said.
Exit polls project that the right-wing coalition led by Modi's Hindu nationalist Bharatiya Janata Party (BJP) will win a big majority when election results are announced on 4 June.
Modi's reelection campaign was partly built on the promise of continued economic development. He's pitching India as an alternative for global firms diversifying their supply chains from China.
India is the world's fastest-growing major economy. But that includes both a booming tech sector and a struggling older economy that doesn't provide enough jobs for everyone else, said Josh Felman, the former head of the International Monetary Fund's office in India.
"What can be done now to provide employment - good jobs for these people - is manufacturing," Felman said.
India successfully lured suppliers for major US corporations like Apple Inc and Alphabet Inc's Google. But less than 3 per cent of global manufacturing takes place in the world's most populous country, compared to 24 per cent for China, World Bank data shows.
The government plans to increase India's share of global manufacturing to 5 per cent by 2030 and 10 per cent by 2047, according to an internal document seen by Reuters. It did not provide specifics.
Reuters spoke to 15 people - including bureaucrats, representatives of major investors, economists and trade unionists - who identified three significant obstacles holding India back from manufacturing hub status: restrictive labour laws, challenges acquiring land, and a rigidly inefficient tariff regime.
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