According to Piyush Goyal, India's minister of commerce and industry, the country is still a popular choice for foreign direct investment (FDI) even though interest rates throughout the world are skyrocketing.
As a result of the tightening of interest rates, money began to flow back into wealthy countries.
"During that time, it seemed like developing economies would have been hit much harder than India was. However, the robust demand and opportunities in India prevented us from experiencing the precipitous decline that many of our peers went through," Goyal stated at Friday's Global Business Summit.
India is still a great place to put your money.
I would have thought global balance sheets were quite pressured during this era, but there was a lot of reinvestment of earnings, so we still have large foreign direct investment (FDI)," he remarked.
With Singapore and Mauritius as the leading sources, foreign direct investment (FDI) equity inflows dropped 24% to $20.4 billion in the first half of FY24 compared to the previous year.
The fact that India's outflows were $71.35 billion less than its inflows in FY23 was deemed not "material" by Goyal. Its persistence as an inflow of foreign direct investment is a crucial component. "You need some time for it to cool down also when you see a very rapid growth on any statistic," he said.
In his opinion, India has managed to strike a delicate balance when it comes to controlling inflation, according to Goyal, who said that an economy might suffer from "very harmful" continual and rapid expansion in its money supply.
At a time when inflation rates across the globe are at record highs, he said India's rate is at a 40-year low. The past ten years under Narendra Modi's leadership have witnessed "tremendous fiscal stability, and today’s fundamentals of the economy will hold us in good stead," and the country's average decadal inflation has been at its lowest point in history.
To entice non-resident Indians (NRIs) to invest in the country, the then-government announced the Foreign Currency Non-Resident Bank (B) or FCNRB policy in August 2013, when the rupee had fallen to roughly 68 to the dollar.
We pay them 1.75–2% more than what the market would bear. We made it possible for non-resident Indians to participate by putting in 5-10% of their own funds and borrowing the remaining amount from foreign institutions. The rupee's value has been artificially inflated to around 56–57 dollars per dollar, according to him. He went on to claim that although it could appear like the rupee has depreciated from 57 to 83 over the past decade, the actual depreciation rate is closer to 68–83 dollars.
Over the last decade, India has ensured that all of its citizens have access to the necessities of life, including food, housing, safe drinking water, and power.
"These requirements seemed like an impossible wish for a long time. In his opinion, "the common man has been empowered" at this time.
Going from being a BIMARU state to a most-favored state, Uttar Pradesh exemplifies transition, according to Goyal. Power, industrial parks, and tourism have all flourished in UP thanks to the state's forthright administration, which has also fostered extraordinary growth through its strong leadership, trained workforce, and unparalleled infrastructure.
He said that anti-graft efforts are top priority and that states like Telangana and Andhra Pradesh have shown significant improvements in this area.
Using criticism as a springboard for growth, Modi has driven numerous missions with his inventive thinking. He added that the administration plans to build an inclusive society by empowering the less privileged and providing them a proper role in society over the next five years.
Goyal claims that the government is marked by a relentless pursuit of improvement, a dedication to serving the 1.4 billion people, an openness to new ideas, and a spirit of constant striving for betterment.
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