India has outstripped the United States and China as the world’s biggest foreign direct investment destination, attracting more than $31 billion in investments in the first half of this year, compared with China’s $28 billion and $27 billion for the US.
Finance minister Arun Jaitley, unsurprisingly, was quick to link rising capital flows to the policies initiated by the government of development-driven Prime Minister Narendra Modi.
The figures were revealed by the Financial Times on Tuesday although it’s unclear how the paper arrived at the figure. The FT did say its compilation included estimated investments and the domestic capital investments committed to by foreign firms in India.
Notably, this comes at a time when FDI into emerging markets is showing a declining trend “with 97 of 154 countries experiencing reduction in capital expenditure on greenfield investment projects in the first six months of this year compared with the same time period last year”, the FT reports.
The Narendra Modi government has taken several initiatives to make India an attractive investment destination.
PM Narendra Modi has traveled to several countries to market India and lure investors. The ‘Make in India’ campaign, which aims to turn India into a global manufacturing hub, has also been widely publicised.
The government has also relaxed regulations governing FDI in a number of sectors, including retail, telecoms and, most notably, defence.
Swifter approvals for businesses have been put in place and Mr Jaitley has repeatedly promised “fair and predictable” tax regime.
According to experts economic troubles in India has led to many foreign investors looking to India as an alternative market for investments although India still has a considerable way to go to match China’s 2014 total of $75 billion.