New Delhi: Prime Minister Narendra Modi on Tuesday said India can be a reliable and resilient manufacturing partner for the world and that recent free trade agreements offer an opportunity to provide the highest quality goods and services.
Studying preferences and comfort levels in other countries is a top priority, Modi said while speaking at a post-Budget webinar to discuss reforms in sectors such as manufacturing and logistics, as well as for micro, small and medium enterprises (MSME). “The world today is looking for reliable and resilient manufacturing partners. India has an opportunity to play this role strongly.”
India signed several Free Trade Agreements (FTAs) in FY26, including those with the United Kingdom and the European Union. India also agreed to an interim agreement with the US to increase market access for Indian exporters while protecting strategic industries. The joint statement on February 6 was about reducing New Delhi’s customs duty to 18% from the earlier 50%. However, on February 20, the US Supreme Court ruled that the unilateral tariffs imposed by President Donald Trump were illegal, leading to a blanket 10% tariff on all states.
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“India has signed FTAs with many countries. A huge avenue of opportunities has opened up for us. In such a scenario, it is our responsibility to never compromise on quality. If we are to focus our energy, intelligence, power and understanding on one thing, we have to put a lot of emphasis on quality,” the Prime Minister said.
Modi also added that studying the requirements of trading partners is a must and urged the industry to invest heavily in research and adopt new technologies to ensure quality.
Modi’s call for businesses to embrace new technologies and ensure quality comes as the country seeks to improve manufacturing competitiveness and its position in the global goods value chain. India is struggling to maintain its economic growth momentum at a time of disruption to the multilateral trade regime and heightened global uncertainty. The US-Israeli attack on Iran has already sent The West Asian region is in turmoil, disrupting key trade routes and driving up oil prices.
MSME reforms
On reforms to the MSME sector, Modi said the increase in investment and turnover limits for the MSME categorization has eased fears among businesses that expanding their business would result in loss of government benefits. From April 2025, the Union government revised the definitions of micro, small and medium enterprises and increased the investment and turnover limits for these enterprises as part of its FY26 budget reforms.
According to the new definitions, micro-enterprises can invest up to ₹2.5 billion in plant and machinery and have an annual turnover of up to ₹10 million crowns. Their former limits were ₹1 million and ₹5 million, or The government has similarly revised the investment and turnover limits used to categorize SMEs.
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Small businesses are now defined as businesses with investments in equipment and machinery ₹25 million and turnover below ₹100 million crowns. The definition of medium-sized enterprises was expanded to include investments up to ₹125 million and a turnover of up to ₹500 million crowns. Previously, there was an investment limit for medium-sized enterprises ₹50 million and their turnover must have been lower ₹250 million crowns.
India has about 77 million SMEs, which contribute about 30% of the country’s total economic output and 45% of its exports.
MSMEs must increase productivity, raise quality standards and integrate into digital processes and strong value chains, Modi said in line with the FY26 Economic Survey strategy to manufacture key elements of global value chains (GVCs) – a strategy called “strategic resilience”.
Take advantage of policy changes
Modi also urged the industry to take advantage of the policy changes in the Union Budget to reduce costs and improve efficiency.
He noted that the country is historically the largest investment expenditure ₹12.2 trillion was approved in the Union Budget for FY27, which created a plethora of opportunities for the industry.
“This year’s budget proposes record capital expenditure. Building high-capacity transport systems, improving connectivity between railways, highways, ports, airports and waterways and expanding various freight corridors and multimodal connectivity are necessary steps to reduce costs and increase efficiency,” he said.
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He also said that India needs to use its urban centers as channels for growth, especially Tier II and III cities, while focusing on sustainability as a major part of the business strategy.
“India’s future growth will depend on how effectively we plan and manage our cities,” the prime minister said in his speech.
“Today, a major transformation is taking place in the global economy. Markets are no longer looking only at costs, but also at sustainability. An important initiative in this direction is carbon capture, use and storage,” Modi said. “Now sustainability must be part of your core business strategy. Industries that invest in clean technologies early will be able to gain better access to new markets in the coming years.”
