New Delhi, Sep 25 — Chief Economic Adviser (CEA) V. Anantha Nageswaran on Friday hailed India’s ability to attract foreign capital with its broader manufacturing and overall reforms, stressing that the most important thing for the industry is global competitiveness.
Addressing the 13th ‘PAFI annual forum’ here, the CEA said that when we talk about what India should be doing on FDI, "the general perception is that we should do more, and yes, we should always aim to do better and more".
According to him, the global environment in which investment decisions are made has shifted, making it important to assess India’s FDI performance in that context.
"It is not that we are not doing things to improve our FDI receptivity, but the world is constantly shifting. Therefore, what we need to do also increases, but it does not mean even if we tick boxes, the money will start flowing tomorrow,” Nageswaran told the gathering.
"You can do everything right, and the public will see that there is no result, and will therefore be clamouring for more, but the point is global context has shifted," Nageswaran said.
"Steady growth of 7 per cent higher, declining inflation and fiscal prudence that has earned credit rating upgrades are among the signals that matter," he noted.
Nageswaran also pointed to investor protection, tax-policy certainty and consistency, and availability of skilled talent and logistics as other factors that can influence investment decisions.
These factors are important, but investors may be more patient if macroeconomic stability is not in place, he stressed.
"The changing global interest-rate environment could also have a significant bearing on the cost of capital and cross-border investment flows," the CEA added.
The next phase of India's foreign direct investment (FDI) policy should focus not only on attracting investment but also on creating an environment in which investment can be sustained, expanded and more deeply integrated with India's economic and industrial ecosystem, an Assocham study said this week.
According to official DPIIT/RBI data, total FDI inflows rose from $4 billion in FY2000-01 to around $95 billion in FY2025-26, while FDI equity inflows rose from $2 billion to $59 billion over the same period. Between FY2000-01 and FY2025-26, India received a cumulative total of $1.16 trillion in FDI and $791 billion in FDI equity.