News / Asia

India Attracts Record Foreign Investment Despite Slowdown

Employees watch as a tunnel boring machine is lowered at a construction site of the Delhi Metro Rail Corporation (DMRC) in Chelmsford Club in New Delhi, January 31, 2012.
Employees watch as a tunnel boring machine is lowered at a construction site of the Delhi Metro Rail Corporation (DMRC) in Chelmsford Club in New Delhi, January 31, 2012.

India attracted record foreign investment of about $50 billion last year. Despite a slowdown in its economy, India continues to be an attractive global investment hub.

Much of the economic news in India during the last year was not positive. High inflation persisted. The rupee depreciated. The stock market lost nearly a quarter of its value. Growth rates were revised downwards to seven percent.

But foreign investors are still keeping faith with the potential of Asia’s third largest economy. In the first eleven months of 2011, foreign direct investment totaled $50.81 billion, up 13 percent from the previous year, according to a recent report by global consultancy Ernst & Young.

Analysts say India’s expanding middle class and a large and cheap labor force remain attractive for global businesses.

Chief economist at consultancy Crisil in Mumbai, D.K. Joshi says economic turbulence in Western countries means multinationals will have to explore Asian markets for growth. Among these, India’s huge domestic market is clearly one of the main magnets.

"Growth slowdown that is taking place in India needs to be looked at in the global context. If you look at the weak growth prospects in advanced countries, especially Europe and Japan, and tepid recovery in U.S., seven percent growth in India looks very good.  So, from a growth differential perspective I think we are still very attractive," said Joshi.

India has been attracting foreign investment in sectors such as automobiles, telecommunication, technology and pharmaceuticals.

But the area where it desperately wants foreign investment is infrastructure - a sector in which India plans to spend one trillion dollars in the next five years. On a recent visit to the United States, Indian Finance Minister Pranab Mukherjee pitched for overseas businesses to help build the highways, ports and power plants which the country needs.

However, analysts point out that many foreign investors have been deterred by lack of governance and slow policy-making in India.

D.H. Pai Panandiker heads the economic think tank, RPG Goenka Foundation in New Delhi. He says foreign investment in India also remains below potential because many sectors of the economy are still closed to outsiders.

"It could have encouraged much more if reforms had come. It would have been a flood of foreign investment. What people are expecting is more liberal reform.  Retailing is one area, but in others like insurance, banking… that would make a considerable difference to Indian economy," he said.

The government has been assuring investors that those reforms will come. Although it backtracked on opening the retail sector to overseas investors in December, because of political opposition, the government's top ministers have said that the decision is only on hold and will be implemented.

Investors are wanting to tap the potential of the Indian market and U.S. based companies are the leading investors in India.

On Monday, U.S. based Starbucks Corporation announced plans to open its first store in August, to woo coffee drinkers.  It plans to soon expand to 50 outlets.  Like other companies, analysts point out that Starbucks wants to expand in the Asia-Pacific region, where growth is accelerating faster than in the United States.  

You May Like

Video New Brain Mapping Techniques Could Ease Chronic Pain

New methods for mapping pain in the brain not only validate sufferers of chronic pain but might someday also lead to better treatment More

Sierra Leone's Stray Dog Population Doubles During Ebola Crisis

Many dog owners fear their pets could infect them with the virus and have abandoned them, leading to the increase and sparking fears of rabies More

Fake, Substandard Medicines Pose Global Challenge

So-called 'fake drugs' include expired medicines, those with manufacturing defects, and bogus tablets More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
New Brain Mapping Techniques Could Ease Chronic Paini
X
Shelley Schlender
April 20, 2015 7:03 PM
Pain has a purpose - it can stop you from touching a flame or from walking on a broken leg. As an injury heals, the pain goes away. Usually. But worldwide, one out of every five people suffers from pain that lasts for months and years, leading to lost jobs, depression, and rising despair when medical interventions fail or health experts hint that a pain sufferer is making it up. From Boulder, Colorado, Shelley Schlender reports that new methods for mapping pain in the brain are providing validation for chronic pain and might someday guide better treatment.
Video

Video New Brain Mapping Techniques Could Ease Chronic Pain

From Boulder, Colorado, Shelley Schlender reports that new methods for mapping pain in the brain are providing validation for chronic pain and might someday guide better treatment.
Video

Video Hope, Prayer Enter Fight Against S. Africa Xenophobia

South Africa has been swept by disturbing attacks on foreign nationals. Some blame the attacks on a legacy of colonialism, while others say the economy is to blame. Whatever the cause, ordinary South Africans - and South African residents from around the world - say they're praying for the siege of violence to end. Anita Powell reports from Johannesburg.
Video

Video Italy Rescues Migrants After Separate Deadly Capsize Incident

Italy continued its massive search and rescue operation in the Mediterranean Monday for the capsized boat off the coast of Libya that was carrying hundreds of migrants, while at the same time rescuing Syrian migrants from another vessel off the coast of Sicily. Thirteen children were among the 98 Syrian migrants whose boat originated from Turkey on the perilous journey to Europe.
Video

Video New Test Set to Be Game Changer in Eradicating Malaria

The World Health Organization estimates 3.4 billion people are at risk of malaria, with children under the age of five and pregnant women being the most vulnerable. As World Malaria Day approaches (April 25), mortality rates are falling, and a new test -- well into the last stage of trials -- is having positive results in Kenya. Lenny Ruvaga reports for VOA from Nairobi.
Video

Video Are Energy Needs Putting Thailand's Natural Beauty at Risk?

Thailand's appetite for more electricity has led to the construction of new dams along the Mekong River to the north and new coal plants near the country's famous beaches in the south. A proposed coal plant in a so-called "green zone" has touched off a debate. VOA's Steve Sandford reports.
Video

Video Overwhelmed by Migrants, Italy Mulls Military Action to Stabilize Libya

Thousands more migrants have arrived on the southern shores of Italy from North Africa in the past two days. Authorities say they expect the total number of arrivals this year to far exceed previous levels, and the government has said military action in Libya might be necessary to stem the flow. VOA's Henry Ridgwell reports.
Video

Video Putin Accuses Kyiv of ‘Cutting Off’ Eastern Ukraine

Russian President Vladimir Putin, in his annual televised call-in program, again denied there were any Russian troops fighting in Ukraine. He also said the West was trying to ‘contain’ Russia with sanctions. Henry Ridgwell reports on reactions to the president’s four-hour TV appearance.
Video

Video Eye Contact Secures Dog's Place in Human Heart

Dogs serve in the military, work with police and assist the disabled, and have been by our side for thousands of years serving as companions and loyal friends. We love them. They love us in return. VOA’s Rosanne Skirble reports on a new study that looks at the bio-chemical bond that cements that human-canine connection.
Video

Video Ukrainian Volunteers Search for Bodies of Missing Soldiers

As the cease-fire becomes more fragile in eastern Ukraine, a team of volunteer body collectors travels to the small village of Savur Mohyla in the what pro-Russian separatists call the Donetsk Peoples Republic - to retrieve bodies of fallen Ukrainian servicemen from rebel-held territories. Adam Bailes traveled with the team and has this report.
Video

Video Xenophobic Violence Sweeps South Africa

South Africa, long a haven for African immigrants, has been experiencing the worst xenophobic violence in years, with at least five people killed and hundreds displaced in recent weeks. From Johannesburg, VOA’s Anita Powell brings us this report.
Video

Video Apollo 13, NASA's 'Successful Failure,' Remembered

The Apollo 13 mission in 1970 was supposed to be NASA's third manned trip to the moon, but it became much more. On the flight's 45th anniversary, astronauts and flight directors gathered at Chicago's Adler Planetarium to talk about how the aborted mission changed manned spaceflight and continues to influence space exploration today. VOA’s Kane Farabaugh reports.
Video

Video Badly Burned Ukrainian Boy Bravely Fights Back

A 9-year-old Ukrainian boy has returned to his native country after intensive treatment in the United States for life-threatening burns. Volodia Bubela, burned in a house fire almost a year ago, battled back at a Boston hospital, impressing doctors with his bravery. Faith Lapidus narrates this report from VOA's Tetiana Kharchenko.
Video

Video US Maternity Leave Benefits Much Less Than Many Countries

It was almost 20 years ago that representatives of 189 countries met at a UN conference in Beijing and adopted a plan of action to achieve gender equality around the world. Now, two decades later, the University of California Los Angeles World Policy Analysis Center has issued a report examining what the Beijing Platform for Action has achieved. From Los Angeles, Elizabeth Lee has more.
Video

Video Endangered Hawaiian Birds Get Second Chance

Of the world's nearly 9,900 bird species, 13 percent are threatened with extinction, according to BirdLife International. Among them are two Hawaiian honeycreepers - tiny birds that live in the forest canopy, and, as the name implies, survive on nectar from tropical flowers. Scientists at the San Diego Zoo report they have managed to hatch half a dozen of their chicks in captivity, raising hopes that the birds will flutter back from the brink of extinction. VOA’s George Putic reports.
Video

Video Exhibit Brings Renaissance Master Out of the Shadows

The National Gallery of Art in Washington has raised the curtain on one of the most intriguing painters of the High Renaissance. Mostly ignored after his death in the early 1500s, Italian master Piero di Cosimo is now claiming his place alongside the best-known artists of the period. VOA’s Ardita Dunellari reports.

VOA Blogs