E-Paper
Sign In
NRIs in UAE: Is it a good idea to invest in a factory in India now?
A well-known US-based company has stated that India is becoming the export base for automobile components and is emerging as a key pillar of growth and innovation
- PUBLISHED: Tue 17 Mar 2026, 6:03 PM
Question: My family business in India manufactures auto components. It was started as a small scale unit but is now growing fast. I have been invited to invest in this firm. Is it worth taking the risk as my savings are involved?
ANSWER: As global automakers are looking to diversify supply chains, India’s improving trade access through free trade agreements with Europe and other countries is positioning the country as an export hub. Original Equipment Manufacturers are increasingly scouting for suppliers who can co-develop and deliver integrated solutions rather than standalone components. A well-known US-based company has stated that India is becoming the export base for automobile components and is emerging as a key pillar of growth and innovation.
Recommended For You
French and German automakers are relying on Indian auto components to the extent of almost 60 per cent of their requirements. Therefore, for component manufacturers in India like your firm, the next phase requires scaling up, localising advanced technologies, and using acquisitions to move up the value chain. Prospects for investments in this business are therefore promising.
Question: The stock market price of IT companies has fallen in recent weeks on the basis that new AI tools will make software and other IT services redundant. Is this perception right as investors are in two minds?
ANSWER: The IT services sector has survived many disruptions in the past. When the app revolution happened, it was thought that thousands of engineers in the software business would lose their jobs. This did not happen because IT services went into cloud migration. Software engineers were needed to move workloads from internal data centres to the cloud and for engineering legacy applications for cloud-native environments. Therefore, most analysts believe that new AI agents will not kill IT-enabled services companies because they will be needed to manage numerous AI tools, the security risks that come with them, the cost unpredictability of these systems, and the conflicts that will arise between different AI models. In short, IT services companies will become essential for all of these.
If an AI agent corrupts production data, a vendor will still be needed to diagnose and fix the same. For mission-critical systems and for regulated enterprises in banking, insurance, healthcare and other services, AI must be explainable, auditable and compliant. Therefore, substantial work will emerge for IT companies as businesses begin to pilot and scale AI solutions. Companies are therefore retraining their workforces in AI tools with particular emphasis on reskilling and upskilling of middle level engineers. It is therefore expected that both revenues and profitability will increase in the coming years for technology driven IT companies.
Question: The recent GDP growth rate of India for financial year 2026-27 is projected at 7.4 per cent. Is the basis of computing the GDP reliable?
ANSWER: International organisations have projected the rate to be between 7.2 per cent and 7.4 per cent. The Statistics Ministry of the Indian Government has been compiling the new GDP series based on direct data integration with the use of numerous alternative data sources. The new series will compute demand directly using the consumption expenditure survey, recognising structural shifts in the economy. Data will be gathered based on household consumption expenditure survey, the Goods and Services Tax network, information used for vehicle registration to estimate road transport services and logistical activities, payroll data to track salaries and wages of those formally employed, periodic labour force survey for labour market data, debt and investment survey for calculating interest rates and capital formation.
Data will also be collected from unincorporated enterprises to directly measure the gross value added by small businesses and micro and medium enterprises. The new series will capture data pertaining to e-commerce, fintech services, gig workers, renewal energy and technology driven sectors. Direct tracking of Government expenditure at Central and State levels forms a critical part of the gross domestic production. The output and input values are adjusted to calculate real value added, which would prevent distortions caused by volatile raw material prices such as oil and metals. The new GDP basket will now have 600 items, up from 180 considered in the old series. Thus, the new GDP data series will be accurate, authentic and reliable.
HP Ranina is a practising lawyer, specialising in corporate and fiscal laws of India.