NEW DELHI: India aims to attract at least US$100bil a year in gross foreign direct investment (FDI), a top official says, as the South Asian nation courts investors looking to diversify away from China.
“Our target is that we will average at least US$100bil over the next five years.
“The trend is very positive and upward,” Rajesh Kumar Singh, secretary in the Department for Promotion of Industry and Internal Trade, said in an interview in New Delhi.
The ambitious target compares with an annual average of more than US$70bil in FDI in the five years through March 2023 and would be a reversal in trend after last year’s decline.
Singh said that the figure for the current fiscal year will be “closer to” the US$100bil target.
The world’s fastest-growing major economy is appealing to businesses that want to hedge against geopolitical tensions by spreading their operations more broadly –sometimes called a “China plus one” strategy.
Companies like Apple Inc and Samsung Electronics Co have boosted manufacturing in India, taking advantage of incentives offered by Prime Minister Narendra Modi’s government.
Still, foreign investment hasn’t matched the pickup in local manufacturing. Singh attributed that to higher inflation and interest rates in developed nations, as well as geopolitical conflicts and risk perception about emerging markets.
India has “unmatched market growth opportunity in a variety of sectors.
“These include electric vehicles, electronic goods or general consumer goods, where penetration levels in our population is far lower than the global average,” he said in the interview.
He vowed that the government will take more steps to ease FDI rules. — Bloomberg
