India should overcome investment downturn

Significance

July RBI data show updated gross FDI inflows of USD71.4bn in fiscal year 2022/23 (April-March), down from USD84.8bn in 2021/22. This was the first annual fall since Prime Minister Narendra Modi came to power in 2014.

Impacts

• Boosting inward FDI will be high on the agenda of the Modi government, especially with next year’s general election drawing closer.
• It will be harder to sell personal computers, laptops and tablets to India from November, due to a new licensing regime for their import.
• Gujarat state’s under-construction GIFT City will be a key hub for attracting more FDI and foreign portfolio investment in the long term.