India may have witnessed a dip in overall FDI, but there are indications that the nation is witnessing interest in greenfield developments.
According to reports, the United Nations Conference on Trade and Development (UNCTAD) pointed to the encouraging advancements last week in a presentation to the finance ministry.
India ranks among the top three countries in greenfield FDI announcements, according to new findings from the UN agency.
A senior finance ministry official who spoke with The Economic Times believes that the country is attracting fresh global capacity expansion in line with supply chain diversification,
“What we are seeing, in the last few months and in specific sectors, is that India is becoming part of the global supply chains,” Bibek Debroy, chairman of the Economic Advisory Council to PM (EAC-PM), was quoted as saying.
“India has been trying to build an environment that is conducive for FDI while also trying to reduce its dependence on China, particularly more so after Covid. Moreover, other countries, because of various other pressures, are also looking at reducing their dependence on China.”
Former chief economic adviser and International Monetary Fund executive director KV Subramanian agrees ‘it’s advantage India’.
“As investors are looking for opportunities to generate high returns, the negative trends on FDI in China present a crucial opportunity for India,” he told the business daily. “To ensure that we avail this opportunity, we must continue to undertake structural reforms and complete the several reforms that were initiated post-Covid. The window of opportunity for India to benefit from this negative trend is finite!”
He believes China’s negative FDI flow is a reflection of structural issues with its economy, which are compounded by strong demographic headwinds.
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