FDI Inflows Into India Likely To Rise To 2.5 Per Cent Of GDP In Next Five Years: Report

Backed by economic growth and ongoing structural reforms, Foreign Direct Investment (FDI) inflow into India will rise to 2.5 per cent of the Gross Domestic Produce (GDP), a new report prepared by UBS Securities India says.

According to the report, FDI has doubled in the last 10 years to reach $42 billion and stood at 1.9 per cent of GDP in 2016-17. The report also stated that FDI inflows into India saw a compound annual growth rate of 11 per cent following 2014 general election against a dip of 6 per cent seen over the previous five years.

The report said that India has recorded a growth in FDI inflows to the manufacturing sector in the last few years. FDI flows into manufacturing “bodes well for creating a productive spill-over impact on other sectors of the economy; for instance, boosting exports and creating jobs,” the report reads.

It added that India needs “to focus on attracting stable FDI flows to improve the competitiveness of its manufacturing sector and to make it an integral part of the global value chain”.