Japanese electronic giant Panasonic will step up production capabilities in India by expanding its manufacturing facilities at the Sri City factory in Andhra Pradesh.

According to Ryo Matsumoto, general manager of the living energy business division at Panasonic Electric Works, Panasonic plans to spend Y100bn ($671.04m) on expanding its global electrical and equipment business by 2030, excluding Japan.

“Of this, Y30bn ($201.30m) is earmarked for investment by fiscal 2024,” Matsumoto added, cited by The Hindu, without naming the countries in which Panasonic would invest. He added that India remains a top investment priority for Panasonic’s growth strategy, which will focus on expanding capacity, adopting new technologies and strengthening its market position against competitors in the next five to ten years.

In November, the company launched a new industrial IoT and smart factory solution in India to digitise production lines and factory floor operations for manufacturers there. In FY 2023, Panasonic invested $3.15bn in R&D operations, or 5.6% of its total revenues.

However, competition for India’s labour resources is gradually picking up. In March 2023, South Korea’s Samsung promised to invest in smart manufacturing facilities at its smartphone plant in Noida, Uttar Pradesh.

In an interview for the Financial Times, T M Roh, president and head of mobile experience at Samsung Electronics, said the investment will increase the company’s production capabilities in India.

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Overall, the country is set to benefit from the growing number of foreign direct investment (FDI) projects, with foreign investors now more intent than ever to develop their China Plus One strategy. In 2022 alone, India ranked as the third-largest investment destination, surpassing China in terms of FDI projects.

“The initiation of major investment deals at the beginning of the year underscores India’s commitment to economic reforms and sustained growth,” Deepti Aggarwal, production manager of FDI at GlobalData, told Investment Monitor last month.

“Predominantly, these substantial investment agreements are concentrated in Gujarat, followed by Tamil Nadu and Maharashtra. These states have established themselves as leaders in infrastructure, development, network capacity, policy stability, and maintain a robust law and order framework.”