Economic Survey 2025-26 Advocates Multi-Pronged Approach to Sustain FDI Inflows
The Economic Survey for the fiscal year 2025-26, released ahead of the Union Budget, has emphasized the critical importance of a multi-pronged strategy to sustain Foreign Direct Investment (FDI) inflows into India. This comes in response to increasing global economic volatility and shifting geopolitical dynamics that pose challenges to international capital flows.
Key Recommendations for Enhancing FDI Attractiveness
The survey outlines several strategic pillars to bolster India's position as a preferred investment destination:
- Policy Stability and Predictability: Ensuring consistent and transparent regulatory frameworks to build investor confidence.
- Sectoral Reforms: Focusing on key sectors such as manufacturing, technology, and infrastructure to attract targeted investments.
- Ease of Doing Business: Streamlining administrative processes and reducing bureaucratic hurdles for foreign investors.
- Infrastructure Development: Enhancing physical and digital infrastructure to support business operations and connectivity.
Addressing Global Economic Challenges
In light of global volatility driven by factors like trade tensions, monetary policy shifts in major economies, and geopolitical conflicts, the survey stresses the need for proactive measures. It highlights that while India has maintained robust FDI inflows in recent years, sustaining this momentum requires adaptive strategies to navigate external uncertainties.
The document also points to the importance of leveraging India's demographic dividend and growing domestic market to attract long-term investments. By fostering innovation and supporting startups, the country can create an ecosystem conducive to high-value FDI.
Implications for India's Economic Growth
Sustained FDI is crucial for India's economic growth, as it brings in capital, technology, and expertise. The survey's recommendations aim to not only retain existing investments but also attract new ones, thereby boosting job creation and industrial development. As the global landscape evolves, India's ability to implement these strategies will be key to maintaining its competitive edge in the international investment arena.
