Policy stability can make India a new growth engine for foreign investment, Financial Times estimates
Reforms like GST, bankruptcy law, and Digital India have played a key role in attracting foreign investment. India has demonstrated to foreign investors its ability to implement technological changes at scale through digital payments and UPI.
Amidst sluggish global GDP growth and growing geopolitical concerns about China, India is emerging as a new hope for foreign investors. Financial Times reports and analyses have described India as Asia's investment magnet. The newspaper states that if policy stability and transparency are maintained, India can become a new growth engine for foreign investment.
India's growth rate will remain higher than the global average for the next five years. A young population and a strong consumer market are India's greatest assets. The Financial Times wrote, "India's demographic dividend provides a base for investors, which is diminishing in China. Rising costs in China, US pressure, and geopolitical risks are driving global companies toward supply chain diversification." Therefore, India is becoming the biggest beneficiary of the China+1 strategy. Companies like Apple, Dell, and Samsung are already expanding production in India. European and Japanese companies are betting on India for manufacturing.
The Financial Times stated that reforms like GST, bankruptcy law, and Digital India are playing a key role in attracting foreign investment. India has demonstrated to foreign investors its ability to implement technological changes at scale through digital payments and UPI. Incentive packages in semiconductors, renewable energy, and defense manufacturing have also attracted global investors. Opportunities are immense, but challenges are also not infrequent. Tax disputes and sudden policy changes remain risks. Land acquisition, labor laws, and the long duration of judicial processes are major obstacles. India's regulatory risk premium is always on the minds of investors.
The Make in India initiative, launched in 2014, focused on manufacturing and FDI. Digital India got a new impetus with the launch of UPI in 2016. GST was implemented in 2017. Record FDI was received in 2019. In 2020, India emerged as a global leader in digital services and e-commerce. In 2021, investment in mobile manufacturing increased due to PLI scheme. In 2022, European and American companies made huge investments in renewable energy projects. In 2023, a special package for semiconductors. In 2024, announcements of private investment in the space sector were made. In 2025, the world's eyes were fixed on India.
