Banking on Modi, foreign investors to pour $60b into India

Foreign investment inflows are estimated to more than double to $60 billion level this fiscal as overseas investors repose confidence in Narendra Modi-led government that is expected to unleash big-bang reforms to reboot the economy, says an Assocham study.

"Riding on huge expectations from the incoming Modi government, global investors are gung ho on the Indian economy which is expected to witness over 100 per cent increase in foreign investment inflows - both FDI and FIIs - to above $60 billion in the current financial year as against $29 billion during 2013-14," the study projected.

The net foreign investment inflows, led by aggressive foreign institutional investors (FIIs) in the Indian equity and debt markets in 2014-15, are expected to even overtake the figure of $46.17 billion during fiscal 2012-13, one of the best years for overseas investment inflows, it estimated.

"The unfolding scenario also points to easing of prices and lowering of interest rates, the two major challenges that the Indian economy had been facing for some years now," Assocham President Rana Kapoor said.

However, the emerging situation will pose a new challenge to the Reserve Bank to deal as it will have to balance the rupee rate and inflation from the increased liquidity into the system.

The new Finance Minister and the RBI, thus, will have to be on the same page in dealing with this scenario which will see strengthening of Rupee and a further improvement on the current account balance, Assocham said.

In the current fiscal, the FII investment would remain more than the FDI inflows, Assocham said. The expectations are that FII investment in both debt and equity could exceed $35 billion while the FDI money could be above $25 billion.

"If the Modi government is able to take some reforms- friendly measures along with taming inflation and earning goodwill of the people, the FDI will do a fast catch-up with the FIIs. The euphoria must be taken advantage of and things will move on from there," Kapoor said.

Significantly, India will continue to outpace all other emerging economies in terms of FII inflows which would not be affected much by the tapering of the Quantitative Easing by the US Federal Reserve, the study found.

Besides, as the new government goes about removing obstacles in investment, FDI is likely to pick up again in the key infrastructure areas of ports, airports, roads and energy, the study said.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • Those willfully defaulting on loans should be blacklisted by Sebi

    As reported by this newspaper’s Monday edition, the Securities and Exchange Board of India (Sebi) has found merit in the Reserve Bank of India’s s

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Arun Kumar Jain

Kickstarting technological innovation

One of the key dimensions of global competitiveness is the ...

Kuruvilla Pandikattu SJ

Developing moral, spiritual capacity

Writing in The Huffington Post, Noam Chomsky, professor emeritus, MIT ...

Gautam Gupta

Manufacturing must keep workers’ welfare in mind

It may be early days yet, but the labour reforms ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture