Govt strives for quantum jump in FDI

Even though there was a 62 per cent fall in net foreign direct investment (FDI) to India in 2023-24, the government is preparing a multi-pronged action plan to attract long-term capital of an additional overseas capital of $50 billion every year. It is looking at long-term capital both debt and equity, says a news report.

Quoting official sources, The Financial Express has reported that talks have been initiated with many countries, including the US and key European nations, where finance capital is parked. “A complementary plan is to create a couple of Funds under the National Investment and Infrastructure Fund (NIIF) to pool investments in specific infrastructure projects, the sources said.”

With potential investors expressing concerns about the bankability of some of India’s large scale infrastructure projects, the action plan involves readying a clutch of large “investible projects”, where the investors have little to worry about return on investments, the sources said.

The Centre is targeting foreign investment in national highways and railways, which are currently funded through Budget as well as newer areas like green energy ventures such as solar, wind and green hydrogen.

While net FDI declined to $10.6 billion during the last fiscal from $28 billion in 2022-23, gross inward FDI almost remained stable at $71 billion, as compared with $71.4 billion in 2022-23. The fall in net FDI is attributed mainly to higher repatriation.