A little over a month ago, we at Orbis Economics had brought out a special report projecting India's FDI inflows to be potentially the highest ever in 2015-16, touching (or crossing) the US$ 50bn mark. Our analysis was motivated by a Financial Times report that put India on top of the global FDI league table, ahead even of China, to which it is often compared.
Even though the Prime Minister in a recent speech mentioned that topping league tables is hardly India's goal, ironically, some of the landmark moments can arrive most unexpectedly. Indeed, India has challenging problems to deal with right now - continued sluggishness in industrial production, limited credit offtake, poor corporate results among others. Nevertheless, the economy shines in comparison with other major emerging economies. As an instance - Brazil and Russia - are actually witnessing shrinking economies, and the Chinese slowdown has the world on tenterhooks.
Presumably to deal with the ongoing domestic economic challenge, the latest set of FDI relaxations by the government from sectors like defence, construction development, select financial services, media, agriculture among others is likely to further encourage FDI inflows into the economy. Though so far we have hard numbers for only the first quarter of 2015-16, making it a wait and watch, we will be betting on continued FDI inflows. Raising the question again: How long before we hit US$ 50bn?
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