Contrary to the general trend of a pandemic-induced slow down dragging back world economy, Indian economy has been marked to be the “most resilient” in the sub region of South and South-West Asia over the long term.
The happy forecast has come through a thorough study on foreign direct investment (FDI) trends by the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) which has duly noted that FDI flows to South and South-West Asia were mainly driven by India which accounted for 77 per cent of the total inflows in the sub region.
The growth story of foreign direct investments into India is set to scale higher peaks in 2021 too after the Centre’s continuous reform measures and further improvement in the overall business climate.
There is a growing interest among overseas investors about India’s economic packages and thriving local digital ecosystem especially among e-commerce majors. Irrespective of the global slow down and the COVID-19 pandemic, FDI into India recorded a significant jump.
India’s large market is poised to attract more investments after the pandemic as the FDI flows have been steadily increasing.
Facebook and Google’s investment in Jio Platforms in 2020 worth USD 5.7 billion and USD 4.5 billion, respectively, confirmed the new trend of emergence of India’s telecom and digital space as areas of interest for global majors. Facebook’s huge investment in Mukesh Ambani’s Jio Platform helped India receive around USD 43.5 billion FDI during the January-September 2020 period and going ahead, the bullish trend is expected to continue.
With relaxed FDI norms, many other sectors like defence production will be key areas forfresh investments in the year ahead, offsetting the losses caused in the difficult year of 2020.
The economic resurgence is still in the first gear across the world but India’s process has gathered pace following generous pumping in of timely stimulus packages via the ‘Atmanirbhar Bharat Abhiyan’ and accommodation of major sectors, including the Micro, Small and Medium Enterprises (MSMEs), in the revival packages.
Estimates have also suggested that by next five years core digital sectors like Information and Technology, digital communication services and electronics manufacturing could double their size.
The green shoots in economic revival can spread a wave of positivity in the other stagnant sectors as well. The real estate and agriculture sectors need a fresh boost to come out of the blues caused by the long lockdown.
If the good vibes through FDIs in other sectors trickle down to these sectors too with more investment schemes floated by the Centre, then the revival will only aid in quicker growth of the country’s economy.
Such rapid changes in growth projection by top international agencies confirms that the reform measures planned by the Finance Ministry to over come the gloom a repaying dividends, slowly but surely.
Economists could not have fathomed the sea-change when the calender year 2020 started on a weak note as India’s GDP growth rate hit a six-year low in 2019 and then progressively decelerated further.
Key to future growth now lies in staying aggressive while being a keen participantin global economic recovery. The coronavirus pandemic has forced many countries to adopt protectionist measures. As markets started becoming insular, global economic recovery too took a hit.
In the total larger picture, India has done well to strike a fine balance between the two strategies.
On the one hand it stayed away from the highly dangerous Regional Comprehensive Economic Partnership (RCEP) but on the other hand India has started tapping several opportunities to deepen bilateral trade ties.
The latest gesture towards forging a bond with the markets in United Kingdom after its formal divorce from the European Union is a right step in right direction. Economic recovery is possible only with such open-minded approaches. The green shoots are formally taking shape now.
