FDI fuels double-digit growth
Austrade’s Ashley Brosnan sets out the FDI picture:
Despite the COVID-19 crisis, foreign direct investment (FDI) inflows into India grew 13% in 2020. This is an extraordinary achievement – and a landmark development in a country that has historically proved challenging to foreign investors.
The rapid inflow of investment makes India one of the few countries to experience double digit growth in FDI during 2020. It means India is now a top 10 destination for FDI, and it heralds a sea change in global investment sentiment.
Multinationals are seeking to move their supply chains into the subcontinent. The push factor is a desire to diversify from an over-dependence on China. The principal pull factor is a young, competitive workforce, particularly in the information technology and construction sectors.
FDI flows into India contrast sharply with the global picture. For example, FDI flows into China grew by 4% last year, while FDI flows globally fell 42%. FDI flows into developed economies fell 69%.
Investment in India is likely to grow significantly over the next decade.