Rajesh Kumar Singh, the secretary in the Department for Promotion of Industry and Internal Trade, has unveiled India’s ambitious plan to attract a minimum of $100 billion in gross foreign direct investment (FDI) annually. This bold objective comes as many investors and multinational corporations are seeking to diversify their investments away from China, presenting India with a unique opportunity to bolster its economic growth.
The $100 billion target represents a substantial increase from the average annual FDI inflows of over $70 billion recorded in the last five years through March 2023. Despite facing challenges such as global uncertainties, India remains steadfast in its pursuit of this goal, with Singh expressing confidence that the current fiscal year’s FDI figure will be closer to the target.
Singh emphasized that India’s aim is to sustain an average FDI inflow of at least $100 billion over the next five years, citing a positive and upward trend in investment sentiment. The country’s strategic approach, often referred to as the “China plus one” strategy, seeks to attract businesses looking to diversify their operations amid geopolitical tensions.
India’s attractiveness as an investment destination has been on the rise, with companies like Apple Inc. and Samsung Electronics Co. expanding their manufacturing activities in the country, leveraging incentives provided by Prime Minister Narendra Modi’s government.
However, despite India’s efforts, recent data from the Organisation for Economic Co-operation and Development (OECD) revealed a decline in the country’s share of global FDI inflows. This underscores the need for continued reforms and policy measures to enhance India’s competitiveness in attracting foreign investment.
A report by Kotak Institutional Equities highlighted the challenges faced by India in achieving a substantial surge in FDI despite its strategies and policies. The report suggested realigning focus towards the domestic market and increasing presence in higher value-added goods for exports to overcome hurdles in established value chains.
Despite these challenges, there is optimism that investments in sunrise sectors will accelerate in the coming years, contributing to India’s economic growth and global competitiveness.
Sources: businesstoday.in