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Will FDI help boost India’s GDP growth? Here’s what experts say

Updated : December 02, 2020 07:55 PM IST

A CII-EY report on foreign direct investment (FDI) indicates that India can expect to attract $120 to 160 billion of foreign direct investment (FDI) annually by 2025 if it is able to maintain its FDI to GDP ratio between 3 percent and 4 percent.

The report said this in turn can help boost India's GDP growth rate to 7 to 8 percent. For context, India's FDI to GDP ratio has lagged at 1.8 percent in the current decade. The report, based on a survey to gauge market sentiment among Indian as well as non-Indian companies, noted that India has emerged as one of the top three choices for overseas investments in the next two to three years.

About 50 percent of respondents see India amongst the top three economies or leading manufacturing destinations of the world by 2025. The respondents have pinned down market potential, skilled workforce and political stability as the top three reasons that make India their favoured destination.

As the COVID-19 pandemic resets economies across the world, FDI will play a significant role in reviving economic growth as it is an important source of non-debt finance for development. So what needs to be done to improve India’s competitiveness and is the current reform agenda helping the cause?

To discuss that and more findings of the report, CNBC-TV18’s Shereen Bhan spoke to Kamal Bali, president and managing director of Volvo Group India; Akshay Bellare, president of Honeywell India and Sudhir Kapadia, national tax leader at EY.

For more, watch the video
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