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 Democrats Clinton, Kaine Offer 'Very Different Vision' Than Trump

    In a jab at Trump, Clinton says her team wants to 'build bridges, not walls'; Obama Hails Kaine's record; Trump calls Kaine a 'job-killer'

    Turkey Wants Pakistan to Close Down institutions, Businesses Linked to Gulen

    Thousands of Pakistani students are enrolled in Gulen's commercial network of around two dozen institutions operating in Pakistan for over two decades

    AU Passport A Work in Progress

    Who will get the passport and what the benefits are still need to be worked out

    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.
    In State of Emergency, Turkey’s Erdogan Focuses on Spiritual Movementi
    X
    July 22, 2016 11:49 AM
    The state of emergency that Turkish President Recep Tayyip Erdogan has declared is giving him even more power to expand a purge that has seen an estimated 60,000 people either arrested or suspended from their jobs. VOA Europe correspondent Luis Ramirez reports from Istanbul.
    Video

    Video In State of Emergency, Turkey’s Erdogan Focuses on Spiritual Movement

    The state of emergency that Turkish President Recep Tayyip Erdogan has declared is giving him even more power to expand a purge that has seen an estimated 60,000 people either arrested or suspended from their jobs. VOA Europe correspondent Luis Ramirez reports from Istanbul.
    Video

    Video Scientists in Poland Race to Save Honeybees

    Honeybees are in danger worldwide. Causes of what's known as colony collapse disorder range from pesticides and loss of habitat to infections. But scientists in Poland say they are on track to finding a cure for one of the diseases. VOA’s George Putic reports.
    Video

    Video Wall Already Runs Along Parts of US-Mexico Border

    The Republican Party’s presidential nominee, Donald Trump, gained the support of many voters by saying he would build a wall to keep undocumented immigrants and drugs from coming across the border from Mexico. Critics have called his idea impractical and offensive to Mexico, while supporters say such a bold approach is needed to control the border. VOA’s Greg Flakus has more from the border town of Nogales, Arizona.
    Video

    Video New HIV Tests Emphasize Rapid Results

    As the global fight against AIDS intensifies, activists have placed increasing importance on getting people to know their HIV status. Some companies are developing new HIV testing methods designed to be quick, easy and accurate. Thuso Khumalo looks at the latest methods, presented at the International AIDS conference in Durban, South Africa.
    Video

    Video African Youth with HIV Urge More Support

    HIV, the virus that causes AIDS, is the top killer of teens in sub-Saharan Africa. But many youths say their experience with the virus is unique and needs to be addressed differently than the adult epidemic. VOA South African Correspondent Anita Powell reports.
    Video

    Video Poor Residents in Cleveland Not Feeling High Hopes of Republican Convention

    With the Republican Party's National Convention underway in Cleveland, Ohio, delegates and visitors are gathered in the host city's downtown - waiting to hear from the party's presidential candidate, Donald Trump. But a few kilometers from the convention's venue, Cleveland's poorest residents are not convinced Trump or his policies will make a difference in their lives. VOA's Ramon Taylor spoke with some of these residents as well as some of the Republican delegates and filed this report.
    Video

    Video Pop-Up Art Comes to Your Living Room, Backyard and Elsewhere

    Around the world, independent artists and musicians wrestle with a common problem: where to exhibit or perform? Traditional spaces such as museums and galleries are reserved for bigger names, and renting a space is not feasible for many. Enter ArtsUp, which connects artists with venue owners. Whether it’s a living room, restaurant, office or even a boat, pop-up events are bringing music and art to unexpected places. Tina Trinh has more.
    Video

    Video With Yosemite as Backdrop, Obama Praises National Parks

    Last month, President Barack Obama and his family visited some of the most beautiful national parks in the U.S. Using the majestic backdrop of a towering waterfall in California's Yosemite National Park, Obama praised the national park system which celebrates its 100th anniversary this year. He talked about the importance of America’s “national treasures” and the need to protect them from climate change and other threats. VOA’s Julie Taboh reports.
    Video

    Video Counter-Islamic State Coalition Plots Next Steps

    As momentum shifts against Islamic State in Iraq, discussions are taking place about the next steps for driving the terrorist group from its final strongholds. Secretary of State John Kerry is hosting a counter-IS meeting at the State Department, a day after defense ministers from more than 30 countries reviewed and agreed upon a course of action. VOA Pentagon correspondent Carla Babb reports.
    Video

    Video Russia's Participation at Brazil Olympic Games Still In Question

    The International Olympic Committee has delayed a decision on whether to ban all Russian teams from competing in next month's Olympic Games in Brazil over allegations of an elaborate doping scheme. The World Anti-Doping Agency recently released an independent report alleging widespread doping by Russian athletes at the 2014 Winter Olympics in Sochi. So far, only Russian track and field athletes have been barred from the Summer Games in Brazil. VOA's Zlatica Hoke has more.
    Video

    Video Scotland’s Booming Whisky Industry Fears Brexit Hangover

    After Britain’s vote to leave the European Union, Scotland’s government wants to break away from the United Kingdom – fearing the nation’s exports are at risk. Among the biggest of these is whisky. Henry Ridgwell reports on a time of turmoil for those involved in the ancient art of distilling Scotland’s most famous product.
    Video

    Video Millennials Could Determine Who Wins Race to White House

    With only four months to go until Americans elect a new president, one group of voters is getting a lot more attention these days: those ages 18 to 35, a generation known as millennials. It’s a demographic that some analysts say could have the power to decide the 2016 election. But a lot depends on whether they actually turn out to vote. VOA’s Alexa Lamanna reports.

    Special Report

    Adrift The Invisible African Diaspora