India’s stance in the FDI (Foreign Direct Investment) index:

What is the future of FDI in india? How could India rank better?

FDI: FDIs are meant as the process by which a foreign company, institution takes charge of a company in a foreign nation by means of investment or accusation where it obtains certain management and administrative rights. In a FDI there’re transfers of monetary capitals along with other valuable resources, i.e., technology, engineered goods, equipment, etc.

Currently the top positions of the FDI index are held by developed and developing economies, such as, United States, China, United Kingdom, Japan and France. India is currently positioned at 7th position in the FDI index.

Future of FDI in India:

Growth: India is considered to be one of the most vastly developing countries of the world with an average GDP growth rate of 7.5% (approximate value), India stands at 5th position in terms of GDP ranking. Thus foreign investors have continuously favoured India in terms of FDI. In 2021 India ranked at 7th position in terms of FDI inflows and had an estimated FDI inflow of a whooping 84.55 billion USD which is expected to grow further in the subsequent years.

Global relations: India’s market has been one of the most traded markets throughout history, in fact, the trade relation between India, Mesopotamia and Egypt is believed to have existed during the Indus Valley Civilization period (2400 BC). In the current era it is one of the few countries to have global, economic and political ties with almost all developed and rapidly developing nations. In fact India plays a crucial role in foreign trades, India is counted as one of the largest exporters of different medical substances, diamonds & jewelleries, agricultural products, etc.

Since the liberalization of the Indian economy to the world market India has been one of the most preferred nations and economies to invest in, because of its large consumer base, large employable population, large domestic output, large labour force, foreign policy, etc.

India is one of such democratic nations of the world which has a prominent and immutable internal stability. Currently two of the top 10 richest persons have Indian origins, named as (as of September, 2022): Gautam Adani (Global rank- 3) and Mukesh Ambani (Global rank- 8).

Foreign policy: After the liberalization, privatization and globalization of India’s economy in 1991, policy towards foreign investors, institutions, companies, etc shaped a lot. India has maintained its diplomatic relations with almost all the worldly nations (i.e., USA, China, UK, Russia, Brazil, South Africa, Singapore, Japan, Mayanmar, South Korea, Israel, Australia, Mauritius, Germany, etc). FDI to GDP of India stands around 2.7% for the fiscal year of 2021-2022.

Employability: India has one of the largest workforce of the world, which constitutes more than 500 million or 50 crore individuals, having the mean age of 28-30 years.India has got a large employable workforce (having an average literacy rate of 79%). In the ‘ease of doing business’ report India received a global rank of 63 which has constantly been improving since the last decade. India has a large pool of skilled and semi-skilled workforce and is often regarded as a global talent hub for its massive pool of professional expertise. As a result, in recent years, India has proved its mettle in the sectors of IT, automobile, petro chemicals, textile, engineering, health care, etc. There’re several governmental and non-governmental organizations which are engaged in the task of skill development in India.

At last it can be safely concluded that with its tremendously growing economy, global relations, foreign policy, employability, etc, India has got potential to have an acceptable FDI growth.