NEW DELHI: When the PM travels to the US this week to woo businesses there, one of the key facts that the government will be talking about is the surge in foreign direct investment since Narendra Modi took over and how his personal touch has helped.
India received $19.78 billion (Rs 1.3 lakh crore) in FDI in 2014-15 from a dozen major FDI source countries that Modi has visited since taking over in May last year. This accounts for nearly two-thirds of the $30.93 billion FDI the country received in the fiscal year, which was 27 per cent more than the year before.
FDI grew quicker after the launch of the Make in India programme in September 2014 — inflows jumped 48 per cent between October 2014 and April 2015 over the year-earlier period, data from the Department of Industrial Policy and Planning showed.
Modi will be reaching New York on Wednesday evening and is scheduled to meet top business honchos. The visit is coming at a time when cynicism is growing about the government’s ability to introduce and implement reforms as promised.
“There has been some questions about the Modi government’s performance when it comes to pace of reforms and ease of doing business,” a foreign diplomat in Delhi said. But a government official from Japan, one of the countries that Modi visited and from where he got a huge investment commitment, told ET there was no major reason to be upset about since Modi became the PM.
While some criticise his frequent foreign visits, others say those trips have helped boost India’s image as an investment destination. “Foreign firms had switched off India in the last couple of years (of the previous government) but they have been upbeat in the past year,” said ex-CII mentor Tarun Das.
“Modi has been able to integrate foreign policy with economic and corporate policies. India is emerging as the apple of everybody’s eye as other BRICS economies are witnessing downslide,” he told ET. “A big change has been brought in the approach towards foreign investors by the PM deciding to meet individual CEOs of global business giants. When domestic investments are constrained and Indian banks have huge NPAs, FDI is key to boosting economy.” A concern that Das has is on the tax regime, which he said needs to be simplified for securing more FDI.
Among the countries that Modi visited, Japan has committed to invest about $35 billion in five years and South Korea about $10 billion. China has assured $20 billion in the next five years, while France has announced $2 billion euros ($2.26 billion). The UAE, which the PM visited last month, has assured to pump in money for India’s $75-billion infrastructure fund. The UK has launched a programme for investments here ahead of Modi’s planned trip in November and Germany is expected to make some announcements related to the Make in India initiative during Chancellor Angela Merkel’s visit to New Delhi in the first week of October.