India has opened its insurance sector to 100% foreign direct investment under the automatic route, effective 5 February 2026. This is the final step in a 25-year liberalisation journey that began with a 26% cap in 2000 and progressively expanded to 49%, 74% and now full foreign ownership. For global insurance groups, the reform enables wholly owned Indian subsidiaries, full strategic control and unrestricted capital deployment in a market targeting “Insurance for All by 2047.” T&A Consulting helps foreign insurers and financial services firms navigate India’s regulatory framework, entity structuring and market entry strategy.

Introduction: A 25-Year Liberalisation Arc

India’s insurance sector has undergone a systematic opening over the past quarter century. In 2000, when the sector was first opened to private and foreign participation, the FDI cap was set at 26%. This was raised to 49% in 2015, then to 74% in 2021. The Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025, passed by Parliament in December 2025 and brought into force on 5 February 2026, removes the final barrier by permitting 100% FDI in insurance companies under the automatic route.

The reform was operationalised through three principal instruments: the legislative amendment to the Insurance Act, 1938; amendments to the Indian Insurance Companies (Foreign Investment) Rules, 2015; and corresponding revisions to Schedule I of the FEMA Non-Debt Instruments (NDI) Rules, 2019. The Department for Promotion of Industry and Internal Trade (DPIIT) formally notified the change through Press Note No. 1 of 2026, dated 9 February 2026.

What Has Changed: Key Regulatory Details

• 100% FDI under automatic route. Foreign investors can now acquire full ownership of Indian insurance companies without prior government approval. This applies to both life and general insurance companies.
• Insurance intermediaries expanded. The scope of insurance intermediaries eligible for 100% FDI has been expanded to include managing general agents and insurance repositories, in addition to the existing categories of insurance brokers, re-insurance brokers, insurance consultants, corporate agents, third-party administrators, surveyors and loss assessors.
• Governance safeguards retained. Despite full foreign ownership being permitted, the chairperson, managing director or chief executive officer of an insurance company must continue to be an Indian citizen. This governance requirement ensures that operational leadership remains locally anchored.
• Premium investment condition. The 100% FDI limit is available for companies that invest their entire premium within India, as announced in Budget 2025. This condition ensures that foreign-owned insurers contribute to domestic capital formation rather than simply repatriating premiums.
• Structural flexibility. The amended legislation enables the merger of non-insurance entities with insurance companies, subject to IRDAI approval. This could allow global financial services groups to integrate their insurance operations with other financial activities in India.

Market Context: Why This Matters Now

India’s insurance market is one of the world’s largest by potential but remains significantly underpenetrated. Insurance penetration stands at approximately 4% of GDP, compared to a global average of over 7% and over 10% in mature markets like the UK and US. The protection gap is enormous: India’s life insurance density is approximately $69 per capita, compared to over $3,000 in the US. The government’s vision of “Insurance for All by 2047” requires substantial capital expansion, greater product innovation and improved penetration across underserved populations, particularly in rural India and among lower-income segments.

The sector has already attracted approximately Rs 82,000 crore ($9.8 billion) in cumulative FDI. Existing foreign partners in Indian joint ventures, such as Prudential (with ICICI), Aviva, AXA, Sun Life, MetLife and Allianz, have long operated under ownership constraints. The 100% FDI reform allows these groups to either buy out their Indian partners or restructure their holdings to gain full control, fundamentally changing the competitive dynamics.

Budget 2026 has reinforced this trajectory with complementary measures including zero GST on individual life and health insurance premiums, a 7.7% increase in government capital expenditure and continued investment in digital infrastructure that supports insurance distribution.

Strategic Opportunities for Global Insurers

• Full ownership and control. For the first time, global insurance groups can establish wholly owned subsidiaries in India, enabling full alignment of strategy, brand, product design and capital allocation with the parent company’s global approach.
• JV restructuring. Existing JV partners can negotiate buy-outs or restructure equity holdings. Given the high valuations of listed Indian insurers (HDFC Life at approximately 55x P/E, ICICI Prudential at 48x, SBI Life at 45x), the financial dynamics of these transactions will be complex but potentially transformative.
• New market entry. Insurance groups that have been deterred by ownership restrictions can now enter India directly. The automatic route eliminates the need for government approval, streamlining the entry process.
• Product innovation. Full control enables faster introduction of global product lines, including parametric insurance, cyber insurance, climate risk products and embedded insurance models that are underdeveloped in the Indian market.
• Distribution modernisation. India’s digital infrastructure (Aadhaar, UPI, ONDC) creates opportunities for digital-first insurance distribution models that can reach underserved populations at significantly lower cost than traditional agency networks.
• Reinsurance opportunities. Full foreign ownership in reinsurance entities opens India’s growing reinsurance market, historically dominated by GIC Re, to greater international participation.

Regulatory Considerations and Entry Strategy

While the FDI cap has been removed, foreign entrants must still navigate a comprehensive regulatory framework. IRDAI licensing requirements, minimum capital norms (Rs 100 crore for life/general insurance, Rs 200 crore for reinsurance), solvency margin requirements, product filing procedures and distribution regulations all apply regardless of ownership structure. Companies must also comply with the Insurance Act’s provisions on investment patterns, which prescribe minimum allocations to government securities and infrastructure.

The Indian citizen requirement for the CEO/MD position means that foreign groups will need to identify or develop senior Indian leadership, creating a talent market opportunity for experienced insurance executives. Transfer pricing arrangements between the Indian entity and the global parent will be subject to scrutiny by Indian tax authorities, particularly for management services, brand licensing and reinsurance arrangements.

Data localisation requirements under the Digital Personal Data Protection Act, 2023, and IRDAI’s own data governance frameworks will affect how foreign-owned insurers manage customer data across jurisdictions.

How T&A Consulting Supports Insurance Sector Entry

T&A Consulting provides end-to-end advisory for global insurance companies entering or expanding in India:

• Market assessment and feasibility studies. We analyse market segments, competitive dynamics, distribution channels and growth projections to help insurers make informed entry decisions.
• Regulatory navigation and licensing. We guide companies through the IRDAI licensing process, FEMA compliance, entity structuring and ongoing regulatory requirements.
• JV restructuring advisory. For existing JV partners considering ownership changes, we provide strategic advice on negotiation, valuation considerations and regulatory approvals.
• Market entry strategy. We design comprehensive market entry strategies covering entity setup, distribution strategy, product positioning and go-to-market execution.
• Ongoing compliance and regulatory support. We provide ongoing support for regulatory filings, compliance monitoring and policy updates.

Contact us at: pnijhawan@taglobalgroup.com to explore insurance sector entry opportunities in India.

Sources & references:
India Briefing, Mondaq, PIB, Bar & Bench, White & Case

In February 2026, the United States and India reached an interim trade agreement that reduced the effective tariff on Indian exports from 50% to 18%, de-escalating months of trade tensions that had threatened over 55% of India’s $87 billion exports to the US. For exporters, investment promotion agencies and foreign companies with India-linked supply chains, this reset creates both relief and new strategic imperatives. T&A Consulting helps businesses, trade promotion organisations and governments navigate the evolving US-India trade landscape and position for the opportunities it creates.

Introduction: From Escalation to Reset

The US-India trade relationship entered turbulent waters in April 2025, when the United States imposed country-specific reciprocal tariffs on Indian goods. The initial 25% reciprocal tariff was compounded by an additional 25% punitive duty linked to India’s continued purchase of Russian crude oil, bringing the effective tariff on most Indian exports to 50%. This was the highest tariff rate faced by any major Asian economy and sent shockwaves through India’s export sectors, particularly engineering goods, textiles, gems and jewellery, and electronics.

The breakthrough came on 2 February 2026, when President Donald Trump announced a bilateral agreement reducing the tariff to 18%. The additional 25% punitive duty was fully rescinded, and the reciprocal tariff was cut from 25% to 18%. Certain designated products, including gems, diamonds, pharmaceuticals, smartphones, select agricultural products, tea, coffee and handicrafts, now attract zero reciprocal tariffs. In exchange, India committed to moving toward zero tariffs on US goods, halting Russian crude oil purchases, shifting energy sourcing to the US, adopting stronger procurement of American products and removing non-tariff barriers in specific sectors.

What the Agreement Actually Contains

The interim framework covers several dimensions beyond headline tariff numbers:

• Tariff reduction. The effective US tariff on most Indian goods dropped from 50% to 18%. Following a subsequent US Supreme Court ruling, this rate was further reduced to 10% under Section 122 provisions, though the full implications are still being clarified by customs authorities.
• Zero-duty categories. Gems and diamonds, pharmaceuticals, smartphones, select agricultural products (tea, coffee, fruits), and MSME-driven handicrafts now face zero reciprocal tariffs in the US. This directly benefits some of India’s most labour-intensive export sectors.
• Indian concessions. India has offered tariff concessions on alcoholic beverages, cosmetics, medical devices and specific agri-inputs from the US. Limited access has been granted for US agricultural products such as dried distillers’ grains, red sorghum and soyabean oil, while protecting sensitive sectors including dairy, rice and millets.
• Energy and geopolitical commitments. India committed to curtailing Russian crude oil purchases and increasing imports of US energy, technology, agricultural products and coal. The 25% tariff on Russian petroleum products imposed on India was terminated on 7 February 2026.
• Ongoing negotiations. The February 2026 agreement is an interim framework. Full bilateral trade agreement (BTA) negotiations are ongoing, covering agricultural market access, intellectual property protections (especially for pharmaceuticals), digital trade rules and defence procurement.

Impact on Indian Exporters and Key Sectors

The tariff reduction has immediate implications across India’s major export sectors:

• Engineering goods and electronics. India’s largest export category to the US, engineering goods saw order inflows stall during the peak tariff period. The reduction to 18% (and potentially 10%) restores competitiveness, particularly for auto components, industrial machinery and electrical equipment.
• Textiles and apparel. India’s textile exports to the US, valued at approximately $9 billion, were severely impacted by the 50% tariff. The reduced rate makes Indian textiles competitive again against Vietnam, Bangladesh and Cambodia, though the tariff differential remains a factor.
• Gems and jewellery. The zero-tariff designation for gems and diamonds is a significant win. India processes over 90% of the world’s diamonds and is the largest exporter of cut and polished diamonds to the US.
• Pharmaceuticals. Zero reciprocal tariffs on pharmaceuticals protect India’s position as the world’s largest generic drug supplier to the US, a market worth approximately $8 billion annually.
• MSMEs and handicrafts. The zero-tariff treatment for handicrafts benefits India’s vast MSME sector, which accounts for approximately 45% of total manufacturing output and employs over 110 million people.

Implications for Foreign Companies and Supply Chain Strategy

The US-India tariff reset reshapes the “China plus one” calculus for multinational companies. At 18% (or 10% post-SCOTUS), India’s tariff rate is now lower than China’s effective rate for many product categories, particularly those subject to Section 301 tariffs (45%+). This positions India as an increasingly attractive alternative manufacturing base for companies serving the US market.

However, the interim nature of the agreement introduces uncertainty. Companies building long-term supply chains need to assess the risk of tariff changes as negotiations continue. The ambitious scope of India’s commitments, including the $500 billion purchasing pledge (relative to India’s total annual government budget of $590 billion), suggests that some elements may be renegotiated or phased over time.

For companies already operating in India or considering India entry, the key strategic questions are: Which product categories benefit most from the current tariff structure? How durable is the 18% (or 10%) rate? What is the timeline for the comprehensive BTA? And how do the India-UK CETA, India-EFTA and other trade agreements interact with the US framework to create multi-market access advantages?

Implications for Trade Promotion Organisations and IPAs

• Update trade facilitation messaging. IPAs and export promotion bodies should quantify the tariff savings under the new framework and communicate them to exporters and foreign buyers.
• Target US companies for India sourcing. The tariff reset makes India-sourced goods more cost-competitive for US importers. IPAs should proactively identify US companies that could benefit from India sourcing in sectors like auto components, textiles, electronics and chemicals.
• Monitor ongoing BTA negotiations. The interim agreement will evolve. Trade promotion organisations should track negotiation developments and advise their stakeholders on emerging opportunities and risks.
• Leverage the zero-tariff categories. Focus export promotion efforts on the product categories that now enjoy zero reciprocal tariffs, including gems, pharmaceuticals, handicrafts and select agricultural products.
• Address non-tariff barriers. India’s commitment to removing non-tariff barriers creates opportunities for US companies entering the Indian market. IPAs should facilitate introductions and help navigate the evolving regulatory landscape.

How T&A Consulting Supports Trade Strategy

T&A Consulting provides comprehensive trade advisory services for businesses, export promotion bodies and governments navigating the US-India trade landscape:

• Trade agreement impact assessment. We quantify the commercial impact of the tariff changes on specific products, sectors and supply chains, helping companies make informed sourcing and investment decisions.
• Market entry and export strategy. We design market entry strategies for Indian exporters targeting the US and for US companies entering India, incorporating the latest tariff frameworks and trade agreement provisions.
• Supply chain advisory. We advise multinational companies on India-based manufacturing and sourcing strategies, including PLI scheme eligibility, state-level incentives and logistics optimisation.
• Policy monitoring and advisory. We track ongoing BTA negotiations and regulatory changes, providing timely updates and strategic guidance to our clients.

Contact us at: pnijhawan@taglobalgroup.com to discuss how the US-India trade reset affects your business strategy.

Sources & references:
India Briefing, ClearTax, Morgan Lewis, PIB, Tariffs Tool

India’s Digital Public Infrastructure (DPI) is no longer a domestic governance story. It is a market entry accelerator. With UPI processing over 600 million transactions daily, ONDC operational in over 630 cities and the India Stack enabling near-instant identity verification, payments and data exchange, foreign companies entering India can plug into a digital backbone that compresses time-to-revenue and reduces operational friction. T&A Consulting helps businesses and trade promotion organisations leverage India’s digital infrastructure for faster, more efficient market entry.

Introduction: What Is India’s Digital Public Infrastructure?

Digital Public Infrastructure refers to foundational, shared digital systems that enable secure interactions between people, businesses and governments at population scale. India’s DPI, commonly referred to as “India Stack,” rests on three foundational layers: digital identity (Aadhaar), real-time interoperable payments (UPI) and consent-based data exchange (Account Aggregator framework and DigiLocker). Built on top of these foundations are sector-specific platforms such as the Open Network for Digital Commerce (ONDC), the Goods and Services Tax Network (GSTN) and the Ayushman Bharat Digital Mission for healthcare.

The scale of adoption is striking. More than 1.44 billion Aadhaar numbers have been generated as of March 2026, covering virtually the entire population. UPI handles approximately 81% of all retail digital payments by volume in India, processing over 21 billion transactions by early 2026 and supporting more than 65 million merchants. DigiLocker has over 67 crore users with more than 950 crore documents issued. India’s digital economy contributed 11.74% of GDP in FY 2022-23, approximately $347.6 billion, with a projection to reach 20% of Gross Value Added by FY 2029-30.

For foreign companies, this infrastructure is not background context. It is operational infrastructure that directly affects how they will sell, collect payments, verify identities, comply with regulations and reach customers in India.

UPI: The Payments Layer That Changes Everything

The Unified Payments Interface, launched in 2016, has transformed how India transacts. Unlike closed proprietary payment systems, UPI is an open, interoperable protocol that enables real-time bank-to-bank transfers via mobile devices, with zero transaction fees for consumers. According to ACI Worldwide’s 2024 report, India accounted for approximately 49% of global real-time payment transactions. Within India, UPI has made digital payments a default behaviour, from street vendors using QR codes to enterprise-scale B2B settlements.

For foreign companies entering India, UPI has several practical implications. First, payment collection is frictionless. Any business, regardless of size, can accept UPI payments through a simple QR code or payment link, eliminating the need for expensive point-of-sale hardware or complex payment gateway integrations. Second, UPI creates a transaction trail that enables small businesses and new entrants to build credit histories, potentially unlocking working capital from banks and fintech lenders. Third, UPI’s cross-border expansion (now live in 8 countries including the UAE, Singapore, France, Sri Lanka, Nepal, Bhutan, Mauritius and Qatar) means that companies with operations across these markets can leverage a common payments infrastructure.

For trade promotion organisations and IPAs advising foreign companies on India entry, UPI is a tangible proof point of India’s digital readiness. It eliminates one of the traditional barriers to market entry: the complexity and cost of setting up payment collection in a new market.

ONDC: Democratising Digital Commerce

The Open Network for Digital Commerce (ONDC), launched in 2022, aims to do for e-commerce what UPI did for payments. It is an open protocol that decouples discovery, ordering, payment and fulfilment, enabling buyers and sellers to transact across applications rather than within proprietary platforms like Amazon or Flipkart. A buyer on one app can discover and purchase from a seller on a different app, with fulfilment handled by yet another provider. This interoperable design lowers barriers for small and medium enterprises that would otherwise be locked out by the high commissions and visibility costs of dominant platforms.

As of early 2026, ONDC is operational in over 630 cities with more than 1.16 lakh retail sellers live on the network. The platform has processed over 154 million cumulative orders, with average daily transactions of approximately 490,000 as of December 2024. While adoption remains uneven and operational frictions persist (particularly in logistics and merchant experience), the trajectory is clear: ONDC is building a public digital commerce layer that any business, foreign or domestic, can plug into.

For foreign SMEs considering India entry, ONDC offers a potentially transformative channel. Instead of negotiating with large marketplace platforms for visibility and bearing 15% to 30% commissions, a foreign brand can list products through an ONDC-compatible seller application, set its own pricing and reach consumers across multiple buyer applications. The network’s open architecture also supports services (food delivery, mobility, logistics), making it relevant beyond retail.

Aadhaar and Account Aggregator: Simplifying KYC and Credit Access

Foreign companies setting up operations in India traditionally face lengthy Know Your Customer (KYC) processes for banking, regulatory registrations and vendor onboarding. Aadhaar-based e-KYC has compressed this from days or weeks to minutes, reducing verification costs from approximately $20 to $0.15 per transaction. Banks, fintech companies and regulatory bodies now accept Aadhaar-based authentication for account opening, loan applications and regulatory filings.

The Account Aggregator framework, operational since 2021, adds another layer of efficiency. It allows individuals and businesses to share verified financial data (bank statements, tax returns, GST filings) securely and digitally with any requesting institution, with the data owner’s consent. For a foreign company seeking to establish banking relationships, secure credit lines or evaluate Indian partners, the Account Aggregator system enables faster due diligence and credit assessment.

DigiLocker, with over 67 crore users, provides a secure digital document wallet for verified documents, including tax filings, educational certificates and business registrations. This reduces the paper documentation burden that has historically slowed business processes in India.

GSTN and GeM: Digital Infrastructure for Compliance and Government Business

The Goods and Services Tax Network (GSTN) is the digital backbone of India’s indirect tax system. All GST registrations, returns and payments are processed through the GSTN portal, creating a transparent and auditable compliance trail. For foreign companies, the GSTN simplifies tax compliance by providing a single, unified system for indirect tax management across all Indian states, replacing the pre-2017 patchwork of state-level VAT, central excise and service tax.

The Government e-Marketplace (GeM) is an online procurement platform used by central and state government agencies. With over 11 lakh micro and small enterprises registered, GeM provides a transparent, competitive bidding environment. Foreign companies with a local entity in India can register on GeM and participate in government procurement, a significant market given India’s public spending on infrastructure, defence and technology.

DPI as a Global Export: India’s Digital Diplomacy

India’s DPI is also becoming a platform for international cooperation. As of February 2026, India has signed Memoranda of Understanding with 24 countries for cooperation on India Stack and DPI. UPI is now live in 8 countries, with further expansion planned. The G20 New Delhi Leaders’ Declaration of 2023 explicitly recognised DPI as a development accelerator, positioning India as a practical partner for countries seeking to build population-scale digital systems.

For trade promotion organisations and economic development agencies, India’s DPI diplomacy creates new opportunities. Countries adopting India Stack-inspired frameworks can facilitate smoother bilateral digital trade, interoperable payment flows and data exchange. The IMF has identified India as a leading example of how shared, reusable digital rails can reshape an economy, estimating that every dollar invested in India’s DPI generates returns of $3.2 to $4.0 across the broader economy.

Practical Recommendations for Foreign Companies

For foreign companies planning India entry, India’s DPI creates specific operational advantages that should be factored into market entry strategy:

• Integrate UPI into your payments strategy from day one. Whether you are a B2C brand, a SaaS company or a services firm, UPI should be your primary payment collection mechanism. It is free, instant, universally accepted and creates a digital trail for reconciliation and compliance.
• Evaluate ONDC as a distribution channel. If you are selling physical products or services, assess whether ONDC-compatible seller applications can provide a cost-effective route to market, particularly for initial market testing before investing in your own e-commerce infrastructure.
• Use Aadhaar-based e-KYC for faster banking and compliance setup. Work with your banking and legal partners to leverage e-KYC for account opening, regulatory registrations and vendor onboarding.
• Build on GSTN for compliance efficiency. Ensure your accounting and ERP systems integrate with GSTN for seamless GST return filing. Many cloud-based accounting platforms (Zoho, Tally, ClearTax) offer built-in GSTN integration.
• Explore GeM for government business. If your products or services are relevant to government procurement, register on GeM to access a transparent, high-volume market.
• Factor DPI into your cost-benefit analysis. India’s digital infrastructure reduces several cost lines that traditionally inflate market entry budgets: payment processing fees, KYC and compliance costs, distribution overheads and customer acquisition costs. Quantify these savings in your market entry business case.

How T&A Consulting Supports DPI-Enabled Market Entry

T&A Consulting helps foreign companies and trade promotion organisations understand and leverage India’s digital infrastructure as part of their market entry strategy. Our services include:

• Digital readiness assessment. We evaluate how India’s DPI layers (UPI, ONDC, GSTN, Aadhaar e-KYC) can be integrated into a company’s operational model, identifying specific cost savings and efficiency gains.
• E-commerce and digital trade strategy. We advise on ONDC integration, digital marketing, cross-border payment flows and digital trade compliance, helping companies build a digital-first India presence.
• Payment infrastructure advisory. We support companies in setting up UPI-based payment collection, cross-border payment flows and integration with India’s banking and fintech ecosystem.
• Market entry strategy and execution. We provide comprehensive market entry support, from feasibility assessment and entity setup to partner identification and go-to-market execution, with DPI integration embedded throughout.
• Trade promotion and IPA advisory. We help trade promotion organisations incorporate India’s DPI story into their investment attraction and trade facilitation strategies, creating compelling narratives for foreign businesses.

If your organisation is evaluating India as a market and wants to understand how UPI, ONDC, Aadhaar and the broader India Stack can accelerate your entry, T&A Consulting can help you build a DPI-integrated market entry strategy.
Contact us at: pnijhawan@taglobalgroup.com to explore how India’s digital infrastructure can work for your business.

Sources & references:
Press Information Bureau (PIB), ORF (Observer Research Foundation), India Briefing, Biometric Update, Stanford Social Innovation Review, CSEP

India’s FDI story is entering a new chapter. Total FDI inflows reached $81.04 billion in FY 2024-25, a 14% increase over the previous year, with manufacturing FDI growing 18% to $19.04 billion. Production-Linked Incentive (PLI) schemes, expanding free trade agreements and global supply chain diversification are reshaping India’s investment landscape. T&A Consulting helps investment promotion agencies, economic development organisations and foreign investors identify, evaluate and act on FDI opportunities across India’s high-growth sectors.

Introduction: The Scale of the Opportunity

India’s FDI trajectory reflects a deliberate policy architecture. Over the past decade, cumulative FDI inflows have grown from $36.05 billion in FY 2013-14 to over $81 billion in FY 2024-25. The government’s approach combines sector-specific liberalisation, performance-based fiscal incentives and a network of expanding trade agreements to attract quality investment. According to UNCTAD’s World Investment Report 2025, while global FDI fell 11% in 2024 to $1.5 trillion and developed economies contracted by 22%, flows to India and Southeast Asia remained stable, with strong project activity maintained.

The DPIIT Secretary has stated that the government is hopeful that FDI may cross the previous year’s record of $80.62 billion in 2026. Several factors support this optimism: the India-UK CETA, the India-EFTA agreement committing $100 billion over 15 years, big-ticket investment announcements from Google ($15 billion for an AI hub), Apple (manufacturing expansion) and Samsung (portfolio expansion), and India’s sustained GDP growth of over 6.5%.

Manufacturing FDI: The PLI-Driven Surge

Manufacturing has become the fastest-growing component of India’s FDI profile. The 18% growth to $19.04 billion in FY 2024-25 is directly linked to the Production-Linked Incentive (PLI) schemes, which the government launched across 14 sectors starting in 2020. The PLI model provides performance-based cash incentives, typically 4% to 6% of incremental sales over a base year, to manufacturers who meet defined thresholds for production, investment and domestic value addition.

The 14 PLI sectors and their combined approved outlay of approximately Rs 1.97 lakh crore ($24 billion) cover:

• Electronics and mobile manufacturing. This sector has seen the most dramatic impact. India’s mobile phone exports grew from negligible levels in 2017 to over $15 billion by 2025. Apple now manufactures a significant share of its global iPhone production in India through contract manufacturers Foxconn, Pegatron and Tata Electronics. Samsung has expanded its Noida factory to one of the world’s largest mobile phone production facilities.
• Automotive and auto components. The PLI scheme for automobile and auto components targets electric vehicles, hydrogen fuel cell vehicles and advanced automotive technology. With the India-UK CETA eliminating the 18% export duty on Indian OEMs, the automotive PLI aligns with new market access opportunities.
• Pharmaceuticals and medical devices. India already supplies over 20% of the world’s generic medicines. The PLI schemes for pharma and medical devices aim to reduce import dependence on active pharmaceutical ingredients (APIs), particularly from China, and build domestic manufacturing capacity for complex formulations and high-value medical equipment.
• Semiconductor and display manufacturing. India’s semiconductor ambitions are backed by a dedicated $10 billion incentive programme. Micron Technology has begun construction of a $2.75 billion assembly and testing facility in Gujarat. Tata Electronics is investing in fabrication capacity. These investments aim to position India in global semiconductor supply chains currently concentrated in Taiwan, South Korea and China.
• Renewable energy equipment. PLI schemes for solar modules and advanced chemistry cell (ACC) batteries target India’s goal of 500 GW non-fossil fuel energy capacity by 2030. Domestic solar module manufacturing capacity is expected to reach 100 GW by 2026, reducing reliance on Chinese imports.
• Textiles, food processing and other sectors. PLI schemes also cover technical textiles, food processing, speciality steel, white goods (air conditioners and LED lights), telecom and networking equipment and drones, creating a broad-based incentive architecture.

Where the FDI Is Going: Sectoral and Geographic Patterns

The services sector remained the largest single recipient of FDI equity in FY 2024-25, attracting $9.35 billion, a 40.77% increase over the previous year. Computer software and hardware accounted for 16% of total inflows, followed by trading at 8%. However, the manufacturing share is growing rapidly and is expected to surpass services within the next two to three years if current trends continue.

Geographically, Maharashtra and Karnataka continue to attract the largest share of FDI, driven by Mumbai’s financial services ecosystem and Bengaluru’s technology sector. Gujarat is emerging as a manufacturing FDI hub, anchored by GIFT City’s SEZ benefits and large-scale projects in semiconductors and renewable energy. Tamil Nadu, Telangana and Delhi-NCR round out the top investment destinations.

The investor profile is also diversifying. While Singapore, Mauritius and the United States remain the top source countries (partly reflecting round-tripping through financial centres), direct investment from Japan, South Korea, the UK and European nations is increasing, driven by the new trade agreements and supply chain diversification strategies.

The Trade Agreement Multiplier

India’s expanding network of free trade agreements is creating a multiplier effect on FDI. The India-UK CETA, the India-EFTA pact and the anticipated India-EU agreement collectively position India as a manufacturing and services hub with preferential access to multiple major markets. This is particularly significant for companies seeking a “China plus one” strategy, where India offers a combination of scale, cost competitiveness, English-speaking talent and improving infrastructure.

SEBI’s SWAGAT-FI regulations, effective from June 2026, will create a unified digital gateway for foreign investors, streamlining onboarding and compliance. This initiative is expected to reduce friction for institutional investors and strengthen India’s positioning as a more accessible and predictable destination for global capital.

Implications for Investment Promotion Organisations

For economic development agencies and investment promotion organisations, India’s FDI landscape demands a sophisticated approach:

• Move beyond generic “Invest in India” messaging. IPAs should develop sector-specific, data-driven investment cases that quantify PLI benefits, tariff savings under new trade agreements and infrastructure advantages in specific geographies.
• Engage Indian outward FDI. India’s outward FDI has also grown significantly. Nearly 56% of India’s outward FDI now flows into low-tax jurisdictions such as Singapore, Mauritius and the UAE. Economic development agencies in these and other countries should proactively target Indian companies seeking international expansion.
• Facilitate supply chain partnerships. Rather than competing for the same pool of large-ticket investments, IPAs should focus on facilitating supply chain partnerships, where foreign companies co-invest with Indian manufacturers to build components, subsystems or finished goods for export.
• Track state-level incentives. Indian states compete aggressively for FDI, offering their own incentive packages on top of central PLI schemes. IPAs should map state-level offerings (capital subsidies, land allocation, electricity concessions, stamp duty waivers) and help investors navigate the state-level approval process.
• Build relationships with DPIIT and state investment agencies. The Department for Promotion of Industry and Internal Trade (DPIIT) and state-level single-window agencies (such as Maharashtra’s MIDC or Gujarat’s iNDEXTb) are the primary institutional interfaces for foreign investors. IPAs should establish formal relationships with these bodies.

How T&A Consulting Supports FDI Strategy

T&A Consulting provides comprehensive FDI advisory services for investment promotion agencies, economic development organisations and foreign investors. Our services include:

• Sector-specific FDI opportunity mapping. We identify and evaluate investment opportunities across PLI sectors, mapping incentive structures, regulatory requirements and competitive landscapes for specific industries.
• Inward investment attraction strategy. We design and execute investment promotion campaigns for EDAs and state governments, targeting foreign companies aligned with India’s priority sectors.
• Market research and feasibility studies. We provide detailed market sizing, competitor analysis and demand assessment for companies evaluating India as an investment destination.
• Regulatory navigation and entity setup. We guide investors through India’s FDI framework, entity incorporation, environmental clearances, land acquisition and state-level approvals.
• India outbound FDI advisory. We help economic development agencies outside India attract Indian companies seeking international expansion, providing intelligence on Indian corporates’ overseas investment plans and facilitating introductions.

Whether you are an investment promotion agency seeking to attract Indian FDI, a foreign company evaluating India as a manufacturing base, or a government body looking to benchmark your investment attraction strategy, T&A Consulting provides the research, strategy and execution support you need.
Contact us at: pnijhawan@taglobalgroup.com to explore FDI opportunities in India’s high-growth sectors.

Sources & references:
Press Information Bureau (PIB), IBEF, India Briefing, Business Standard, UNCTAD

India’s transnational education (TNE) landscape is transforming at unprecedented speed. As of December 2025, seventeen globally ranked universities have received formal approval to establish degree-granting campuses on Indian soil, with 13 or more campuses set to launch between 2026 and 2027. The Indian government aims to quadruple its annual intake of international students to 200,000 by 2030. T&A Consulting supports universities, governments and education agencies with campus establishment strategy, student recruitment, partnership development and regulatory advisory to navigate this new frontier.

Introduction: India as a Destination, Not Just a Source

For decades, India has been the world’s second-largest source of international students, sending hundreds of thousands of young people to universities in the United States, United Kingdom, Canada and Australia every year. In 2022, Indian students spent an estimated $47 billion on overseas education, a figure projected to reach $70 billion by 2025. This outflow represented approximately 10 times India’s annual higher education budget and roughly 2% of GDP, a significant fiscal drain that the government has been keen to reverse.

The structural shift began in 2020 with the National Education Policy (NEP), which explicitly called for internationalisation of Indian higher education. In 2023, the University Grants Commission (UGC) issued detailed regulations allowing foreign universities ranked in the global top 500 to establish fully independent campuses in India with significant autonomy over admissions, fee structures and curricula. In parallel, the International Financial Services Centres Authority (IFSCA) created a pathway for foreign universities to open campuses in Gujarat’s GIFT City, a special economic zone offering a 10-year tax holiday, full profit repatriation and free foreign currency conversion.

The result has been a surge of institutional interest. Three universities are already operational, including Deakin University and the University of Wollongong in GIFT City, and Queen’s University Belfast, which became the first Russell Group institution to open a campus in India. A further 14 institutions have received approvals or letters of intent, with campuses planned in Mumbai, Bengaluru, Gurugram and other cities.

Who Is Coming and Where

The incoming institutions represent a cross-section of global higher education:

• United Kingdom. The UK dominates the early cohort. Queen’s University Belfast, the University of Southampton, the University of Birmingham, Lancaster University, the University of Liverpool, the University of Bristol, Coventry University, the University of Aberdeen and the University of Surrey have all announced India plans. Southampton opened India’s first campus under UGC regulations in Gurugram in mid-2026, while Liverpool is set to launch in Bengaluru with programmes in business, computer science and biomedical sciences.
• Australia. Six Australian universities have announced India plans, led by Deakin and Wollongong, which are already operational in GIFT City. Victoria University has received UGC approval, with its campus location under review.
• United States. Illinois Institute of Technology (Illinois Tech) is the first American university to receive UGC approval, with a campus planned in Mumbai offering programmes in engineering, computer science and business. The first batch is expected to enrol around 300 students at fees approximately one-third of US costs.
• Europe. Italy’s Istituto Europeo di Design (IED) will focus on creative courses in fashion, product and interior design at Mumbai’s International Education City.

Geographically, the campuses are clustering in three zones: GIFT City in Gujarat (leveraging its SEZ status and tax incentives), Mumbai’s emerging International Education City near Navi Mumbai International Airport, and Bengaluru (which offers proximity to India’s technology ecosystem). Gurugram, adjacent to Delhi, has also emerged as a campus location, particularly for UK institutions.

What Is Driving the Surge

Several converging factors explain why foreign universities are moving into India now:

• Regulatory clarity. The UGC’s 2023 regulations and the IFSCA framework provide a clear, structured pathway for campus establishment. Universities can operate with significant autonomy, award degrees equivalent to their home campuses and admit both domestic and international students.
• Demographic scale. India has the world’s youngest population and one of the largest pools of higher education aspirants. The country currently has over 43 million students enrolled in higher education, with a gross enrolment ratio of approximately 28%, well below the OECD average. The growth potential is enormous.
• Financial pressures on home campuses. UK universities in particular are facing financial stress from a domestic tuition fee freeze (capped at GBP 9,250 since 2017), reduced international enrolments due to visa policy changes and rising operating costs. India campuses, often supported by local partners who bear much of the capital investment, offer a new revenue stream.
• Policy tightening in traditional destinations. Canada’s hard cap on study permits (reduced by 48% in 2024), UK visa restrictions, Australian processing delays and US visa uncertainties are pushing Indian students to seek alternatives. A foreign degree earned on Indian soil, at 25% to 50% lower cost, is an increasingly attractive proposition.
• Geopolitical positioning. UK Prime Minister Keir Starmer’s February 2026 visit to India included 14 university vice-chancellors in his 125-member delegation. Education has become a pillar of bilateral diplomacy, and the India-UK CETA explicitly covers education services.

Challenges and Risks: What Universities Must Navigate

The opportunity is significant, but so are the challenges. Research from GOALisB and other analysts reveals that Indian students are approaching these campuses with a cautious, evidence-driven mindset. They are not rejecting or embracing foreign campuses outright. Instead, they demand evidence across four dimensions: placement outcomes, faculty quality, employer recognition and institutional commitment.

• Faculty recruitment and cost. Deploying foreign faculty in India can be 50% to 75% more expensive than hiring locally. If a campus relies entirely on local faculty, it risks losing a key differentiator from domestic institutions. Getting this balance right is critical.
• Placement outcomes. The first few batches are make-or-break. Placement data, employer engagement and alumni success from early cohorts will disproportionately shape trust, enrolment momentum and long-term viability.
• Competition from domestic institutions. India’s top private universities, such as Ashoka, Plaksha and the Indian School of Business, have raised quality standards significantly. Foreign campuses must offer something genuinely additional, whether in curriculum, pedagogy, research access or global mobility.
• Financial sustainability. The revenue model depends on enrolment volume. With initial batch sizes expected to be small (100 to 300 students), reaching breakeven may take several years. Universities relying on local partners for capital investment must manage expectations around return on investment.
• Online competition. By 2023, 58% of all MBA students at US universities were enrolled in online programmes. India’s online education sector is projected to generate nearly $240 billion by 2027. Physical campuses must justify their value proposition against increasingly credible online alternatives.

Strategic Recommendations for Universities Entering India

Based on our experience supporting higher education institutions across Asia, Europe and Africa, T&A Consulting recommends the following approach:

• Lead with outcomes, not brand. Indian students and families are outcome-oriented. Universities should invest early in employer partnerships, internship programmes and career services that can demonstrate tangible employment outcomes from the first cohort.
• Design a faculty model that balances quality and cost. A hybrid model, combining visiting international faculty for core courses with locally recruited academics for tutorial and research support, can maintain quality while managing costs. Transparent communication about the faculty mix builds trust.
• Offer genuine global mobility. The most compelling value proposition for an India campus is the ability to spend a semester or year at the parent institution, with seamless credit transfer and access to global alumni networks. 2+2 and 3+1 models are particularly attractive.
• Invest in research and industry collaboration. Campuses that establish research partnerships with Indian industry and academic institutions will differentiate themselves and attract higher-calibre students and faculty.
• Build a multi-channel recruitment strategy. Recruitment in India requires a blend of digital marketing, agent networks, school counsellor engagement and alumni outreach. The Indian education market is intensely competitive, and brand awareness alone is insufficient.
• Engage with state governments. State governments play a critical role in land allocation, infrastructure support and regulatory facilitation. Universities that build strong relationships with state education departments and development agencies will navigate the setup process more effectively.

How T&A Consulting Supports Foreign Universities in India

T&A Consulting has deep experience in the Indian higher education sector, including our long-standing partnership with Queen’s University Belfast. Our services for foreign universities entering India include:

• Market intelligence and demand analysis. We provide data-driven insights into student demand by city, discipline and fee sensitivity, helping universities make informed decisions about programme design and pricing.
• Campus establishment advisory. We support universities through the regulatory process, including UGC and IFSCA approvals, state-level permissions and infrastructure planning.
• Student recruitment strategy and execution. We design and execute multi-channel recruitment campaigns that combine digital marketing with agent management, school outreach and alumni engagement.
• Partnership development. We identify and facilitate partnerships with Indian universities, research institutions and industry partners, enabling joint programmes, dual degrees and collaborative research.
• Operational advisory. We advise on staffing, faculty recruitment, compliance and ongoing operations, helping universities navigate the practical challenges of running a campus in India.

If your institution is exploring an India campus or looking to strengthen your recruitment and partnerships in the Indian market, T&A Consulting can provide the strategic guidance and local expertise you need.
Contact us at: pnijhawan@taglobalgroup.com to explore how T&A Consulting can support your India higher education strategy.

Sources & references:
The PIE News, GOALisB, Business Standard, University Grants Commission (UGC), University Affairs

The India-UK Comprehensive Economic and Trade Agreement (CETA), signed on 24 July 2025, is the UK’s most economically significant bilateral trade deal since Brexit and India’s most comprehensive with a non-Asian partner. With bilateral trade at $56 billion and a joint target to double it by 2030, the agreement opens new corridors for investment, services trade and professional mobility. T&A Consulting helps economic development agencies, trade promotion organisations and businesses on both sides understand and act on the opportunities created by this landmark agreement.

Introduction: Why CETA Matters Now

The India-UK CETA was finalised on 6 May 2025 after three years of negotiations that began under the Enhanced Trade Partnership signed in 2021. The agreement was formally signed by Commerce and Industry Minister Piyush Goyal and UK Secretary of State Jonathan Reynolds in the presence of both Prime Ministers. It covers 29 chapters spanning goods, services, digital trade, intellectual property, government procurement, business mobility and dispute settlement. India’s Commerce Minister has described it as the most comprehensive trade deal India has ever negotiated.

For economic development agencies (EDAs) and investment promotion agencies (IPAs), the CETA is not merely a tariff reduction exercise. It is a structural shift in how the two economies will interact across trade, investment and talent flows for the next decade and beyond. Understanding the specific provisions and translating them into actionable investment attraction and trade facilitation strategies is essential.

Key Provisions: What the Agreement Actually Delivers

Goods market access. The CETA provides duty-free access on 99% of India’s exports to the UK, covering nearly 100% of trade value. This includes labour-intensive sectors such as textiles, leather, marine products, gems and jewellery, footwear and toys, as well as high-growth sectors like engineering goods, chemicals, agricultural products and pharmaceuticals. On the UK side, India will remove or reduce tariffs on 90% of tariff lines, covering 92% of existing UK goods imports. India has agreed to eliminate tariffs on 64% of lines immediately upon entry into force, with further staging over 10 years bringing the total to 85%.

Services and digital trade. The UK has made commitments across 12 broad service sectors and 137 sub-sectors, covering over 99% of India’s export interests. These include IT and IT-enabled services, financial services, education, healthcare, professional services (architecture, engineering, management consultancy), telecommunications and aviation support. India has committed across 11 sectors and 108 sub-sectors, including accounting, financial services, telecom and environmental services. The digital trade chapter includes provisions on electronic signatures, paperless trading, source code protection and cooperation on emerging technologies, though it stops short of guaranteeing free cross-border data flows.

Business mobility. The agreement creates structured pathways for professionals, including business visitors, intra-corporate transferees, contractual service suppliers, graduate trainees and independent professionals. A notable provision is the Double Contribution Convention, which exempts Indian workers and their employers in the UK from social security contributions for three years. The CETA also establishes a quota of 1,800 annual visas for Indian chefs de cuisine, yoga teachers and classical musicians, and promotes ease of movement for professionals in architecture, engineering, computer-related services and telecommunications.

Investment and government procurement. The agreement includes provisions for transparent and fair government procurement processes, giving UK suppliers access to high-value Indian government contracts in specific sectors. On the investment side, the agreement reinforces India’s liberalised FDI regime while maintaining existing safeguards, including the Press Note 3 (2020) framework requiring government approval for investments from land-border countries.

Sectoral Opportunities: Where the FDI Corridors Open

The CETA creates specific opportunities across several sectors that EDAs and IPAs should prioritise:

• Pharmaceuticals and life sciences. Tariffs on pharmaceutical products will be eliminated immediately upon entry into force. The UK is one of the largest export markets for Indian generics. For UK life sciences companies, the agreement improves access to India’s growing healthcare market, valued at over $370 billion by 2030.
• Chemicals and advanced materials. Full and immediate tariff elimination on inorganic chemicals, organic chemicals and agrochemicals positions India as a competitive supplier to the UK’s $28 billion chemicals market. Industry estimates suggest a 30% to 40% increase in India’s chemical exports to the UK in the first year.
• Automotive. The immediate removal of the 18% export duty on Indian original equipment manufacturers improves price competitiveness. A 15-year phased reduction of duties on luxury car imports (from 110% to 10% for certain categories) will reshape bilateral automotive trade.
• IT and professional services. With the UK offering market access across 137 sub-sectors, Indian IT companies, consulting firms and professional services providers gain new routes into the UK market. The mobility provisions further facilitate on-site service delivery.
• Education. The CETA explicitly covers education services. With 17 UK and international universities already planning campuses in India under UGC regulations, and India aiming to quadruple its intake of international students to 200,000 by 2030, the education corridor is poised for rapid expansion.
• Renewable energy and clean technology. India’s push toward 500 GW of non-fossil fuel energy capacity by 2030, combined with UK expertise in offshore wind, green hydrogen and energy storage, creates a natural investment corridor that the CETA will facilitate.

Implications for Economic Development Agencies and IPAs

For investment promotion agencies on both sides, the CETA demands a recalibration of strategy:

• Update investment attraction messaging. The CETA changes the cost-benefit analysis for companies considering India or the UK as an investment destination. IPAs should quantify the tariff savings, market access improvements and mobility benefits in their pitch materials and investor outreach.
• Target sectors aligned with CETA provisions. Rather than broad-based investment promotion, agencies should focus on the specific sectors where the agreement delivers the deepest commitments. Pharmaceuticals, IT services, education and advanced manufacturing are high-priority verticals.
• Facilitate supply chain realignment. The CETA, combined with global supply chain shifts away from China, positions India as an alternative manufacturing and sourcing base for UK companies. IPAs should proactively identify companies in their jurisdictions that could benefit from India sourcing.
• Leverage mobility provisions for talent attraction. The Double Contribution Convention and professional mobility pathways make it easier and cheaper to deploy Indian talent in the UK and vice versa. IPAs focused on talent attraction should incorporate these provisions into their strategies.
• Build institutional partnerships. The CETA creates a framework for deeper institutional collaboration, including mutual recognition of professional qualifications, regulatory cooperation and joint innovation initiatives. IPAs should identify partner institutions and facilitate introductions.

Context: CETA Within India’s Broader Trade Strategy

The India-UK CETA does not exist in isolation. India has simultaneously concluded a trade agreement with the four-nation European Free Trade Association (EFTA), which came into force on 1 October 2025 and commits Switzerland, Norway, Iceland and Liechtenstein to $100 billion in FDI over 15 years. A similar commitment of $20 billion has been made by New Zealand under its trade pact with India, slated for implementation in 2026. India is also engaged in trade negotiations with the European Union and has existing agreements with ASEAN, Japan, South Korea and several other partners.

This expanding web of trade agreements is reshaping India’s position in global value chains. For EDAs and businesses, the strategic question is not just about bilateral India-UK trade but about India’s emerging role as a hub for multi-jurisdictional market access. A company operating from India can potentially access preferential terms in the UK, EFTA, ASEAN and other markets simultaneously, making India an increasingly attractive base for regional and global operations.

How T&A Consulting Supports CETA-Related Opportunities

T&A Consulting has a long-standing track record advising UK institutions and businesses on India strategy. Our services in the context of the CETA include:

• Trade agreement impact assessment. We help companies and agencies quantify the commercial impact of the CETA on their specific sectors, products and services, including tariff savings, market access improvements and competitive positioning.
• Investment attraction strategy. We support IPAs and economic development organisations in designing CETA-aligned investment promotion campaigns, targeting UK and Indian companies that stand to benefit most from the agreement.
• Market entry and partnership facilitation. We identify and introduce potential partners, distributors and joint venture candidates across India and the UK, facilitating introductions and supporting deal structuring.
• Regulatory and compliance advisory. We guide companies through India’s FDI framework, entity setup process, FEMA compliance and sector-specific licensing requirements, ensuring they can fully leverage the CETA provisions.
• Education and TNE advisory. Building on our partnership with Queen’s University Belfast at GIFT City and our broader higher education practice, we advise UK universities on establishing campuses and programmes in India.

Whether you are a UK company exploring the Indian market, an Indian business seeking to expand into the UK, or an economic development agency looking to attract CETA-enabled investment, T&A Consulting can help you translate the agreement into actionable commercial outcomes.
Contact us at: pnijhawan@taglobalgroup.com to discuss how the India-UK CETA creates opportunities for your organisation.

Sources & references:
Press Information Bureau (PIB), Ministry of Commerce, Government of India, UK Government (GOV.UK), EY India, IBEF

Global companies expanding into India face a critical early decision: hire through an Employer of Record (EoR) or set up a wholly owned subsidiary. The choice affects speed to market, compliance risk, cost structure and long-term strategic flexibility. With India attracting over $81 billion in total FDI in FY 2024-25 and the Asia-Pacific EoR market growing at roughly 10% annually, this decision has never been more consequential. T&A Consulting advises foreign companies on market entry structuring, entity setup and compliance frameworks to ensure a successful India launch.

Introduction: A New Era for India Market Entry

India’s economy continues to draw global attention. FDI inflows reached $81.04 billion in FY 2024-25, a 14% increase over the previous year, with manufacturing alone attracting $19.04 billion. At the same time, the global Employer of Record market is projected to grow from $5.6 billion in 2025 to over $10 billion by 2035. Asia-Pacific is the fastest-growing region, driven largely by hiring activity in India, China and Southeast Asia. For foreign companies, particularly mid-sized firms and growth-stage startups, the question is no longer whether to enter India but how to do it efficiently, compliantly and at the right cost.

Two primary models dominate the conversation. The first is the Employer of Record (EoR), where a third-party entity legally employs workers on behalf of the foreign company, handling payroll, tax, statutory contributions and local compliance. The second is the traditional subsidiary setup, where the foreign company incorporates its own legal entity in India, typically as a private limited company under the Companies Act, 2013. Each model carries distinct advantages and trade-offs, and the right choice depends on the company’s strategic intent, hiring scale, timeline and risk appetite.

Understanding the Employer of Record Model

An Employer of Record acts as the legal employer for a company’s workers in India. The foreign company retains day-to-day control over projects, goals and team management, while the EoR handles all employment-related compliance. This includes registering and remitting Provident Fund (12% employer contribution), Employees’ State Insurance (ESI), Tax Deducted at Source (TDS) under the Income-tax Act, 1961, gratuity and statutory bonus obligations.

The EoR model is particularly attractive for companies that need speed. Onboarding can happen within 48 hours in many cases, compared to the several months required for subsidiary incorporation, GST registration, TAN application and EPFO setup. There is no need to navigate the Registrar of Companies, appoint local directors or maintain a registered office. The foreign company can test the market, validate product-market fit and build an initial team without committing to long-term infrastructure.

However, the EoR model has limitations. The foreign company does not own the employment relationship, which can create challenges around intellectual property assignment, employee loyalty and brand identity. EoR fees, typically ranging from $400 to $700 per employee per month, add up as headcount grows. For teams larger than 15 to 20 employees, the cumulative cost of EoR services can exceed the operational cost of running a subsidiary. Additionally, certain regulated sectors, such as banking, insurance and defence, may require a local entity for licensing and compliance purposes.

Understanding the Subsidiary Model

Setting up a wholly owned subsidiary (WOS) in India gives the foreign company full control over operations, hiring, intellectual property and strategic direction. Under India’s FDI policy, most sectors allow 100% foreign ownership through the automatic route, meaning no prior government approval is required. The subsidiary is incorporated as a private limited company, governed by the Companies Act, 2013, and subject to annual compliance requirements including board meetings, statutory audits, income tax filings and GST returns.

The subsidiary model is the right choice for companies with a long-term India strategy, significant hiring plans and a need for direct contractual relationships with employees, clients and vendors. It allows the company to build its own brand in India, offer equity-based compensation (ESOPs), enter into direct customer contracts and participate in government tenders. It also provides greater control over data governance, which is increasingly important under India’s Digital Personal Data Protection Act, 2023.

The trade-off is time and cost. Incorporation typically takes two to four months, depending on the complexity of the structure, sector-specific approvals and the speed of regulatory filings. Ongoing compliance costs, including statutory audits, annual filings, transfer pricing documentation (for intercompany transactions) and GST returns, require either an in-house finance team or a reliable local compliance partner. Companies must also appoint at least one resident director in India and maintain a registered office.

A Decision Framework: When to Use Which Model

The choice between EoR and subsidiary is not binary. Many companies use both models at different stages of their India journey. The following framework can help guide the decision:

• Market testing (0 to 6 months, 1 to 5 employees). Use an EoR. The priority is speed, flexibility and minimal capital commitment. The EoR allows the company to hire local talent, test demand and gather market intelligence without the overhead of entity setup.
• Early scaling (6 to 18 months, 5 to 20 employees). Begin planning subsidiary incorporation while continuing to use the EoR for existing hires. This hybrid approach ensures continuity while the entity is being set up. Many EoR providers offer transition support, helping migrate employees from the EoR payroll to the company’s own payroll once the subsidiary is operational.
• Growth phase (18 months and beyond, 20+ employees). Operate through the subsidiary. At this scale, the cost savings, control benefits and strategic advantages of a local entity outweigh the convenience of the EoR model. The subsidiary also positions the company for government contracts, banking relationships and potential partnerships with Indian firms.
• Project-based or contract work. If the company’s India presence is tied to a specific project or contract with a defined timeline, a branch office or project office may be more appropriate than either an EoR or a full subsidiary. These structures are lighter than a subsidiary but still require RBI approval and regulatory compliance.

Compliance Considerations: What Foreign Companies Often Overlook

India’s employment and tax landscape is complex, with over 40 central labour laws and numerous state-specific regulations. The introduction of the four Labour Codes (on Wages, Industrial Relations, Social Security and Occupational Safety) aims to consolidate and simplify this framework, but implementation has been gradual and varies by state. Foreign companies must navigate multi-state compliance if hiring across geographies, as Professional Tax, Shops and Establishments Act registrations and certain labour welfare fund contributions differ from state to state.

Transfer pricing is another area of attention. Intercompany transactions between the Indian entity and the foreign parent must be at arm’s length, documented and reported. The Indian tax authorities are active in scrutinising transfer pricing arrangements, particularly in the services and technology sectors. Companies using the EoR model are not exempt from transfer pricing considerations if the EoR arrangement is structured as a service agreement between the foreign company and the EoR provider.

Data protection is an emerging compliance frontier. The Digital Personal Data Protection Act, 2023, imposes obligations on data fiduciaries regarding consent, purpose limitation and cross-border data transfers. Companies hiring in India, whether through an EoR or a subsidiary, must ensure that employee data handling practices comply with this legislation.

The India-UK CETA and EFTA: How Trade Agreements Are Changing the Calculus

Recent trade agreements are adding a new dimension to market entry decisions. The India-UK Comprehensive Economic and Trade Agreement (CETA), signed in July 2025, provides duty-free access on 99% of India’s exports to the UK and opens market access across 137 UK service sub-sectors. The India-EFTA agreement, which came into force in October 2025, commits Switzerland, Norway, Iceland and Liechtenstein to $100 billion in FDI over 15 years. These agreements create new incentives for companies to establish a formal presence in India, as preferential tariff treatment and market access commitments often require a local entity to fully benefit from the provisions.

For UK and European companies in particular, the CETA and EFTA agreements strengthen the case for subsidiary setup, especially in sectors like IT services, financial services, education, pharmaceuticals and manufacturing where the agreements offer the deepest commitments.

How T&A Consulting Supports Market Entry Structuring

T&A Consulting provides end-to-end advisory for foreign companies entering the Indian market. Our services include:

• Market entry strategy and feasibility assessment. We evaluate the optimal entry model based on sector, scale, timeline and regulatory requirements, including comparative analysis of EoR, subsidiary, branch office and joint venture structures.
• Entity incorporation and regulatory compliance. We manage the incorporation process, including company registration, director appointments, RBI filings, FEMA compliance and sector-specific licensing.
• EoR advisory and transition planning. For companies starting with an EoR, we advise on provider selection, contract structuring and the eventual transition to a subsidiary, ensuring no disruption to operations or employee relations.
• Ongoing compliance support. We provide ongoing support for statutory filings, transfer pricing documentation, GST compliance and labour law adherence across multiple Indian states.
• FDI policy and trade agreement advisory. We help companies understand and leverage the provisions of recent trade agreements, including the India-UK CETA and India-EFTA pact, to optimise their market entry and expansion strategies.

Whether you are a growth-stage startup exploring India for the first time or an established multinational planning a major expansion, the choice between EoR and subsidiary deserves careful strategic analysis.
Contact us at: pnijhawan@taglobalgroup.com to discuss the right market entry structure for your India plans.

Sources & references:
Press Information Bureau (PIB), India Briefing, SSR (EoR Market Data), Ministry of Commerce, Government of India

Student mobility is undergoing a structural reset. International student mobility has long been dominated by four destinations – Australia, Canada, the United Kingdom and the United States. However, 2025-2026 marked a turning point, with at least 500,000 students shifting away from the Big Four due to policy tightening and escalating costs. T&A Consulting supports universities and governments with internationalisation strategies, partnership development and policy advisory to navigate this evolving landscape.

Introduction: The End of the “Big Four” Era?

In 2024 roughly 6.9 million students were studying abroad, and this number is projected to exceed 10 million by 2030. However, 2025-2026 marked a structural reset. BONARD’s analysis estimates that at least 500,000 students are shifting away from the Big Four due to policy tightening and escalating costs. As a result, Europe, East Asia and emerging education hubs are gaining market share. The implications for universities and governments are profound: competition is intensifying, new models are emerging and student choices are shaped by policy, economic and social factors.

Student Mobility Reset: Policy Tightening and Economic Pressures

The slowdown in the Big Four stems largely from policy changes:

• Canada. In 2024 the Canadian government imposed a hard cap on study permits, reducing approvals to around 262,100 – 48% below 2023 levels – and extended this cap through 2026. Provinces now have strict allocations, and some graduate work pathways are being narrowed.
• United Kingdom. London has curtailed the length of post-study work visas and tightened dependents’ rules, reducing the attractiveness of UK programmes.
• Australia. Canberra has slowed visa processing and raised financial requirements, adding uncertainty and cost.
• United States. Although total international enrolments reached record levels, new graduate enrolments declined by 12% and overall commencements fell 17%, reflecting visa delays and safety concerns.

At the same time, economic conditions are influencing decisions. Currency depreciation and rising living costs, such as the Indian rupee approaching Rs 90 per US dollar, make overseas study more expensive. Families now weigh the return on investment more carefully, considering tuition fees, living expenses and the likelihood of securing post-study employment.

Emerging Destinations and Regional Hubs

Policy tightening in the Big Four has opened space for new destinations. Europe and Asia are seizing the opportunity:

• Germany and France. Germany hosted approximately 402,000 international students in 2025, while France welcomed around 443,670. Both countries offer relatively low tuition fees, accessible visa pathways and strong post-study work options. They also have shortages in their labour markets, prompting governments to retain international graduates to fill skill gaps.
• Japan and South Korea. Japan recorded 21% year-on-year growth in international students, reaching about 336,000. South Korea surpassed 300,000 international students well ahead of its 2030 target. Attractive scholarship programmes, technological excellence and cultural appeal are key draws.
• Central and Eastern Europe. Countries such as Poland, Czechia and Hungary are expanding English-taught programmes and offering affordable tuition. They benefit from proximity to major European markets and improved quality assurance.
• Middle East and Southeast Asia. The United Arab Emirates, Saudi Arabia, Malaysia and Singapore are building international branch campuses and offering generous scholarships. Malaysia’s digital universities and transnational campuses attract students seeking quality education at lower costs.

These shifts suggest that the global higher education market is becoming multi-polar. The challenge for emerging destinations is not just attracting students but retaining them after graduation to address demographic and skills shortages.

Student Preferences and New Models: Hybrid Multiversity and Transnational Education

Student priorities are evolving. The pandemic accelerated adoption of online and hybrid learning models. Although many students return to campuses for immersive experiences, demand for flexible programmes remains strong. International student demand is growing at roughly 4% annually and could reach 8.5 million by 2030. Hybrid “multiversity” models – combining online courses with short on-campus residencies – are becoming mainstream.

Transnational education (TNE), where students earn degrees from foreign institutions without leaving their home countries or by studying at local branch campuses, is also expanding. Students increasingly prioritise return on investment, employability and cultural experiences. They seek institutions with strong academic reputations, industry links, pathways to employment and opportunities for networking. They value safety, affordability and inclusive environments. Environmental consciousness is growing, with students looking for universities that model sustainability in operations and curricula.

Implications for Universities and Governments

For universities and higher education institutions (HEIs):

• Diversify recruitment strategies. Institutions must expand their recruitment beyond the traditional markets. Partnerships with agents and universities in emerging regions, digital marketing and alumni networks can help reach new cohorts.
• Develop flexible programme offerings. Hybrid and blended models enable universities to tap into new student segments. Short courses, micro-credentials and stackable degrees meet diverse learner needs.
• Strengthen employer partnerships. Aligning curricula with labour-market demands and providing internships and research placements improves employability outcomes.
• Support student retention and well-being. Institutions must invest in services that improve integration, mental health and academic success, particularly for international students facing culture shock and financial pressures.

For governments and policy makers:

• Create predictable visa and migration frameworks. Clear, transparent policies for study permits, dependents and post-study work rights attract talent. Sudden caps or rule changes deter prospective students.
• Invest in quality assurance and accreditation. Emerging destinations must build trust in their education systems through rigorous quality control and transparency.
• Link education to economic development. Policies that allow international graduates to transition into the workforce can help address demographic challenges and skills shortages, as seen in Germany and France.
• Develop digital infrastructure and transnational networks. Cross-border digital identities, credit recognition and payment systems facilitate online and TNE programmes. Public investments in digital public infrastructure (such as India’s DPI stack) can enable secure remote learning and credentialing.

How T&A Consulting Supports Higher Education Internationalisation

T&A Consulting has deep experience assisting universities and governments across Asia, Europe and Africa with internationalisation strategies. Our services include:

• Market intelligence and demand analysis. We provide data-driven insights into student mobility trends, identifying emerging source and destination markets, subject preferences and demographic shifts. We also analyse competitive landscapes and fee sensitivities.
• Partnership development and TNE advisory. We facilitate strategic partnerships between universities, enabling joint programmes, dual degrees and branch campuses. We advise on regulatory compliance, quality assurance and governance structures for TNE ventures.
• Student recruitment and marketing. Our team designs multi-channel recruitment strategies that blend digital marketing with targeted outreach through agents, school counsellors and alumni networks. We craft compelling value propositions emphasising employability, affordability and cultural immersion.
• Policy and framework advisory. We support governments in designing visa policies and incentives to attract and retain international students. This includes advising on post-study work rights, talent attraction schemes and international education strategies.
• Capacity building and training. We provide training for university staff on internationalisation best practices, including intercultural competencies, student support and digital engagement.

By embracing hybrid models, targeting emerging markets and aligning education with workforce needs, your institution or region can navigate this new mobility landscape successfully.
Contact us at: pnijhawan@taglobalgroup.com to explore how T&A Consulting can help build sustainable partnerships and attract the next generation of global talent.

Sources & references:
WENR (WES), BONARD, QS, ORF America

The digital trade revolution is accelerating in 2026. Digital services are reshaping international trade, and secure cross-border data flows, interoperable digital payment systems, digital identity and cloud infrastructure are becoming foundational. T&A Consulting helps governments, trade promotion organisations and businesses leverage digital trade through strategy development, payment infrastructure advisory and e-commerce market entry support.

Introduction: The Rise of Digital Trade

Over the past decade, the world’s trade flows have shifted from physical goods toward digital services, data and online transactions. The Digital Economy Trends 2026 report notes that digital services are reshaping international trade and that secure cross-border data flows, interoperable digital payment systems, digital identity and cloud infrastructure are becoming foundational. Yet the regulatory environment is uneven: fragmented standards and digital sovereignty strategies threaten to limit market access. For investment promotion agencies and trade organisations, understanding digital trade’s trajectory is essential to support exporters and attract investment in digital platforms.

The Digital Trade Revolution: Data, Payments and Standards

Digital trade encompasses the delivery of products and services via electronic means, including cross-border e-commerce, online education, cloud services and data transfers. Three elements underpin its growth:

• Cross-border data flows. Data underpins digital trade. Countries are negotiating digital economy agreements (DEAs) to harmonise standards for privacy, data localisation and cross-border flows. The Digital Economy Trends 2026 report emphasises that interoperable standards for data, security and intellectual-property protection are critical to build trust and enable fair market access. Without these agreements, fragmented regulation can act as a new form of non-tariff barrier.
• Digital identity and secure cloud infrastructure. Digital public infrastructure (DPI) stacks, comprising digital identity, data-sharing frameworks and payment systems, allow governments and private firms to transact securely at scale. The success stories of India’s UPI and Brazil’s Pix illustrate this. Pix and UPI account for 48% and 15% of global real-time payment transactions respectively, providing millions with secure, affordable financial services. The systems are built on open protocols regulated by central banks, lowering costs and fostering innovation. Scaling such systems across borders will require interoperable digital IDs and data-sharing frameworks.
• Interoperable payments. Digital payments are the lifeblood of e-commerce. In India, UPI has become the dominant payment method, powering 85% of all digital transactions and enabling small businesses to accept low-cost instant payments. UPI is now live in nine countries (Bhutan, Nepal, Singapore, UAE, Qatar, France, Sri Lanka, Mauritius and Bahrain), and negotiations could extend its reach to 12+ jurisdictions by 2026, with plans to link to Europe’s TARGET Instant Payment Settlement (TIPS) system. Such corridors reduce remittance costs and facilitate cross-border e-commerce.

Cross-Border E-commerce Growth: B2B and B2C Opportunities

The economic potential of digital trade is enormous. The global B2B e-commerce market will reach US $36 trillion by 2026, growing at a compound annual rate of 14.5%. Asia-Pacific is expected to account for 80% of B2B e-commerce volumes. On the consumer side, global B2C e-commerce revenues are projected to hit US $5.5 trillion by 2027, also growing at roughly 14% annually. India’s e-commerce market, valued at around US $63 billion, is forecast to expand at 14.1% per year between 2023 and 2027, making it one of the fastest-growing retail markets.

This rapid growth is driven by three factors: (a) the proliferation of smartphones and internet connectivity; (b) the adoption of digital payments like UPI and Pix; and (c) the rise of virtual sales models. 90% of B2B companies have moved to virtual sales models, an acceleration caused by the COVID-19 pandemic that has now become permanent. SMEs can now sell globally through online marketplaces, while digital marketing allows micro-entrepreneurs to reach customers across continents.

Digital Public Infrastructure and Payments: Pix, UPI and the Global South

The experiences of Brazil’s Pix and India’s UPI illustrate how digital public infrastructure can democratise trade. Together these systems process nearly two-thirds of the world’s instant payment transactions, offering low-cost, real-time transfers. Built on open, interoperable protocols overseen by central banks, they enable both private innovation and public trust. UPI has drastically reduced costs – digital identity verification costs have fallen from US $10-20 per transaction to about US $0.27 – and allowed millions of small merchants to join the formal financial system. The system also enables micro-ticket payments, cross-border remittances and credit scoring, forming the backbone of India’s e-commerce boom.

Cross-border integration is accelerating. UPI corridors already link India with Bhutan, Nepal, Singapore, the UAE, Qatar, France, Sri Lanka, Mauritius and Bahrain; negotiations are underway with 7-8 countries to expand connectivity to more than 12 by 2026. One notable initiative is the UPI-Fawri+ corridor with Bahrain, which aims to deliver instant cross-border remittances at lower costs. Plans to link UPI with Europe’s TIPS system could enable European merchants to accept UPI payments, further integrating India into global digital trade.

These examples underscore the importance of interoperability and regulatory coordination. Scaling such systems requires strengthening digital identity, data-sharing frameworks and governance models, while ensuring privacy and cyber-security. Emerging economies can learn from the success of Pix and UPI to build their own digital payment infrastructure and facilitate cross-border e-commerce.

Policy and Regulatory Landscape: Harmonising the Rules of Digital Trade

Regulators worldwide are grappling with how to foster digital trade while protecting consumers and national security. The Digital Economy Trends 2026 report calls for harmonised standards for data interoperability, security and IP protection. It notes that digital sovereignty strategies and fragmented regulations risk limiting market access, especially for emerging economies. To unlock the full potential of digital trade, countries must:

• Adopt interoperable digital payment and e-invoicing systems. Linking domestic real-time payment systems through common standards enables cross-border transactions at low cost.
• Develop digital identity frameworks. Secure, privacy-enhancing IDs allow users to authenticate across borders, reducing fraud and enabling online services.
• Improve digital capabilities. Skills in data analysis, cybersecurity, and AI are essential for businesses and regulators to participate effectively.
• Establish pro-innovation regulatory sandboxes. Flexible approaches to testing new technologies can accelerate innovation while maintaining trust.

Failing to harmonise rules could constrain SMEs that rely on cross-border digital platforms, raising costs and creating compliance burdens.

Implications for EDOs, IPAs and SMEs

Opportunities

• Market access for SMEs. Digital platforms lower entry barriers for small firms by providing marketing, logistics and payment solutions. With B2B e-commerce expected to reach US $36 trillion, EDOs should help SMEs adopt digital tools and connect to international buyers.
• Attracting digital services FDI. Regions with strong digital infrastructure can position themselves as hubs for cloud services, fintech, e-commerce fulfilment and remote service delivery. Incentives such as data-centre zones, start-up visas and R&D support can attract investment.
• Talent and skills development. Investing in digital skills enables local workforces to participate in remote work and cross-border services trade.

Challenges

• Regulatory fragmentation. Divergent rules on data localisation, consumer protection and content moderation can hinder cross-border operations. EDOs must help exporters navigate these regimes and advocate for alignment.
• Cyber-security and trust. As transactions migrate online, risks of data breaches and fraud increase. Building trust through robust cyber-security standards and certifications is essential.
• Infrastructure gaps. Reliable connectivity, logistics and digital payment systems are prerequisites for e-commerce. Rural and remote regions may be left behind without targeted investments.

How T&A Consulting Supports Digital Trade and E-commerce Initiatives

T&A Consulting has extensive experience helping governments, trade promotion organisations and businesses leverage digital trade. Our services include:

• Digital trade strategy and capacity building. We work with IPAs and trade organisations to develop strategies that promote cross-border e-commerce, including market prioritisation, regulatory benchmarking and talent development. This includes training SMEs on digital marketing, payments and compliance.
• Payment and digital infrastructure advisory. Drawing on lessons from UPI, Pix and other DPI success stories, we assist governments in designing interoperable payment systems and digital ID frameworks. We also help link domestic platforms to international networks and digital marketplaces.
• E-commerce market entry and lead generation. Our market intelligence identifies high-growth sectors and target buyers. We support exporters in navigating digital trade agreements and cross-border logistics, and we arrange virtual trade missions to connect suppliers with global buyers.
• Data-driven promotion and digital marketing. Using analytics and CRM tools, we help IPAs run targeted campaigns to attract digital services and e-commerce investors. Our team builds microsites, manages digital content and leverages social media to reach decision-makers.
• Policy advocacy and stakeholder engagement. We assist clients in participating in international discussions on digital trade rules, helping them advocate for harmonised standards that enable SMEs to flourish.

If your organisation is ready to navigate this landscape – whether by designing a digital trade strategy, expanding e-commerce exports or developing interoperable payment systems – T&A Consulting can help unlock the power of digital trade.
Contact us at: pnijhawan@taglobalgroup.com to ensure that your region participates fully in the global digital economy.

Sources & references:
Digital Economy Trends 2026, ORF America, World Economic Forum, Finextra, U.S. International Trade Administration

Foreign direct investment (FDI) is entering a period of structural change. Global FDI flows fell by 11% in 2024 to roughly US $1.5 trillion, with developed economies seeing steep declines while North America’s inflows were buoyed by large semiconductor projects. Asia remained the largest host region, but investment into China fell by 29%, while ASEAN countries recorded a 10% increase to US $225 billion. T&A Consulting helps economic development organisations (EDOs) and investment promotion agencies (IPAs) navigate this complex environment with data-driven insights, sector expertise and extensive networks across India, Southeast Asia, Europe and the Americas.

Introduction: A New Chapter for Global FDI

The United Nations Conference on Trade and Development (UNCTAD) reports that global FDI flows fell by 11% in 2024. Indian inflows dipped slightly yet greenfield momentum remained strong, reflecting an underlying shift from cost-driven manufacturing to resilience-driven regional clusters. Incentives now account for roughly 45% of new investment policy measures, and the number of countries with FDI screening regimes has doubled since 2015, evidence of the openness-security paradox and growing geopolitical competition.

Despite this turbulence, FDI remains a critical engine for jobs and growth. The 2026 FDI Outlook survey of 101 experts highlights cautious optimism: respondents believe that resilience, selective openness and innovation will underpin new cross-border flows. They emphasise that critical industries, from digital services and data centres to renewable energy and health, will be the backbone of investment, and that investment sources are shifting eastward towards Southeast Asia and the Middle East.

2026 FDI Landscape: Resilient, Regional and Selectively Green

The recent volatility is not merely cyclical; it reflects a structural transformation. Global value chains are being reshaped as companies diversify suppliers, prioritise resilience over cost and build regional production clusters. Investors are shifting from efficiency-driven global footprints to geographically diversified networks that can weather geopolitical shocks and supply-chain disruptions. Three foundational shifts stand out:

• Geopolitical positioning and regional integration. Countries are repositioning themselves within economic blocs or as neutral connectors, leveraging trade agreements and regional corridors. Southeast Asia has emerged as a preferred base for “China+Many” strategies; between 2019 and 2023 FDI into China fell 17%, while FDI to Southeast Asia increased about 20%. Indonesia received around US $33 billion in greenfield manufacturing FDI in 2023 and Vietnam about US $16 billion, reflecting a rapid shift of export-oriented manufacturing.
• Strategic reorientation towards digital and green technologies. The focus is shifting to sectors less vulnerable to global shocks, such as data centres, advanced manufacturing, renewable energy and health technologies. The average greenfield project size rose from US $53.6 million in 2019 to US $86.5 million in 2025 thanks to multi-billion-dollar data-centre investments. Low-emissions hydrogen FDI announcements now total roughly US $160 billion per year, about 50% more than conventional energy FDI, although only a tenth of projects in the EU and United States have reached final investment decisions.
• Intelligence-driven promotion and asset-light modes. Generic investment promotion is becoming obsolete. IPAs must leverage data and insights to target resilience-driven investors, sustainability-driven industries (renewable energy, creative industries), technology-intensive projects (advanced manufacturing, robotics, AI services) and asset-light modes such as contract manufacturing and licensing. Institutional investors, including sovereign wealth funds, pension funds and private equity, are gaining prominence, requiring new engagement strategies.

Sectoral and Technological Trends: From Megaprojects to Green Hydrogen

The FDI outlook for 2026 is shaped by several sector-specific dynamics:

• Data centres and digital infrastructure. A global capacity rush has turned data-centre projects into megaprojects; 2024-2025 saw average project sizes increase sharply and a strong pipeline is expected in 2026. These facilities underpin the growth of cloud computing, artificial intelligence (AI) and quantum technologies, making them attractive for host locations with abundant renewable energy and robust connectivity.
• Renewables and low-carbon power. Renewables accounted for nearly half of the global power capacity mix in 2025; solar photovoltaic (PV) made up 64% of capacity additions and wind 16%, while solar costs have fallen 81% since 2010 and are projected to decline another 21% in the next five years. Solar capacity is expected to reach 3 terawatts by the end of 2025, and renewables overtook coal for the first time. FDI into low-emission hydrogen projects has surged, creating potential new fuel trade routes between the Middle East and Europe and between Australia and East Asia.
• Electric vehicles and advanced manufacturing. The boom in electric-vehicle (EV) FDI is slowing as China’s dominance and market uncertainty weigh on new projects; EV FDI activity declined in 2024-2025 and recovery will depend on supportive policies and charging infrastructure. Meanwhile, Southeast Asian economies are competing to become EV hubs; Thailand aims for EVs to comprise 30% of its vehicle production by 2030.
• Military and strategic technologies. Global military spending reached US $2.7 trillion in 2024. FDI project numbers in military technology are expected to increase by 33% in 2025. Security concerns and dual-use technologies are tightening screening regimes but also creating opportunities for countries that position themselves as safe, innovation-friendly locations.

These trends point to larger, more capital-intensive projects concentrated in sectors aligned with the digital and green transitions. For EDOs and IPAs, the challenge is to prepare sites and ecosystems capable of hosting megaprojects while ensuring that smaller, asset-light modes are not overlooked.

Implications for EDOs and IPAs: Opportunities and Risks

Opportunities

• Resilience-driven investments. Companies seeking supply-chain resilience are looking for locations with diversified production networks, reliable infrastructure and supportive policies. Regions that can offer access to multiple markets via trade agreements will be attractive.
• Green and digital industries. Renewable energy, low-emission hydrogen, data centres, AI and health technologies are growth sectors. Host locations with abundant renewable resources and skilled talent can position themselves as hubs for green hydrogen and digital infrastructure.
• Institutional investors and megaprojects. The rise of sovereign wealth funds and pension funds means IPAs must cultivate relationships with long-term capital providers and prepare bankable project pipelines.
• Local supply-chain development. As multinationals emphasise regional sourcing, there is scope for supplier development programmes, cluster development and joint ventures.

Risks and Complexities

• Geopolitical fragmentation. Trade disputes, investment screening and technology controls can delay or deter projects. EDOs must monitor changes in national security regulations and align with compliance requirements.
• Competition and incentives. With incentives accounting for nearly half of all new investment measures, “incentive wars” may erode tax bases. Transparent, performance-based incentives that emphasise sustainability and skills are preferable.
• ESG and community expectations. Investors increasingly scrutinise environmental, social and governance (ESG) practices. Host communities demand local benefits and minimal environmental impacts, especially for large energy and infrastructure projects.
• Talent shortages. Advanced industries require specialised skills. Regions with weak education and training systems may struggle to capture FDI in AI, renewable energy and life sciences.

Policy Environment: Balancing Openness and Security

The openness-security paradox is evident in policy trends. 46 countries now have FDI screening mechanisms, double the number in 2015, and screening often targets technology and critical infrastructure. At the same time, incentives such as India’s Production-Linked Incentive (PLI) schemes remain a key tool to attract investment; India offers sector-specific incentives for electronics, pharmaceuticals, medical devices and automotive components, with the government aiming to achieve US $300 billion in electronics production by FY26.

Industrial policies in many jurisdictions now integrate climate goals and digital transitions. The United States’ Inflation Reduction Act (IRA) and the European Union’s Green Deal provide tax credits and grants for renewable energy and battery manufacturing. Meanwhile, the rise of digital public infrastructure, such as India’s Unified Payments Interface (UPI), demonstrates how open, interoperable platforms can reduce transaction costs and encourage formalisation. Policies that foster innovation while maintaining cyber-security will be critical.

How T&A Consulting Supports EDOs and IPAs in 2026

T&A Consulting understands that attracting investment in 2026 demands more than general promotion. Our approach is grounded in data-driven insights, sector expertise and extensive networks across India, Southeast Asia, Europe and the Americas.

• Market intelligence and sector prioritisation. We provide rigorous analysis of FDI trends, sector opportunities and competitor landscapes. For example, we help identify which segments within renewables, such as solar, wind and green hydrogen, offer the most promise based on cost curves and policy incentives, and map potential investors.
• Investor targeting and pipeline building. Using proprietary databases and customised research, we build tailored lists of target companies and institutional investors, focusing on resilience-driven and green sectors. We assist IPAs in crafting value propositions that align with investors’ sustainability agendas and supply-chain needs.
• Site readiness and ecosystem development. For regions aspiring to host megaprojects or data-centre investments, we conduct feasibility assessments, benchmark infrastructure and labour availability, and coordinate with utilities and service providers to ensure investment-ready sites.
• Policy and incentive advisory. We help design transparent, performance-linked incentive packages that attract quality investments without creating fiscal burdens. Our teams advise on aligning regional incentives with national policies such as PLI schemes and green finance initiatives.
• ESG integration and community engagement. We support clients in embedding ESG criteria into investment projects, ensuring that social and environmental considerations are addressed. This includes stakeholder consultations, impact assessments and ESG reporting frameworks.
• Aftercare and supply-chain localisation. Retaining investors is as crucial as attracting them. We assist with aftercare programmes, supplier development and partnerships with local SMEs to maximise spill-over benefits.

Resilience, sustainability and digitalisation will shape investment flows. Economic development organisations and investment promotion agencies must adopt intelligence-driven strategies that balance openness with security and target sectors that will define the next decade.
Contact us at: pnijhawan@taglobalgroup.com to discuss how we can help your organisation seize the opportunities of this new investment era.

Sources & references:
UNCTAD, fDi Intelligence, McKinsey, FT Locations, Investment Monitor, World Economic Forum, T&A Global Group