As Foreign Investors pull out, India readies itself to embrace others in Pandemic times

Last updated on February 13th, 2023 at 04:38 pm

Indian states had reasons to alter labour laws and open doors to foreign investment that was shifting shop from China. The trend that started in April has continued ever since as an American Congressional report shares how foreign investors already invested have been winding up work in India.

It has been confirmed that foreign investors are pulling out as much as $16 billion out of India. This has been disclosed by a latest American Congressional report. The report also says that as much as $26 billion has been pulled out of developing Asian economies itself, due to the pandemic and lockdown situations facing these nations.

Even then, India is going to be showing marginal growth in its economy, unlike Europe and the rest of the world which has been severely affected due to corona virus lockdowns. The same report has also projected small but positive rate of growth for China and Indonesia as well for the rest of 2020. This is because, while India might lose out of foreign investment, this crisis will become a turning point for it to exhibit qualities of self reliance and opportunities for in-house technological innovation as well.

The trend of the pullout started in the beginning of April as the world’s second largest economy went into a mass shutdown. The Foreign Investors Portfolio (FIP) in April had pulled back a whopping, $ 1.98 billion from the country’s capital market. This has been confirmed by National Securities and Depository Limited (NSDL). India has seen a rough sea in the last two years, but since the lockdown, the draining of funds has been much more.

PM Narendra Modi has instructed various state governments to find alternate ways to attract investment back to the country. For this, various states have been in discussion with companies in America, Japan and Korea that are looking for alternate markets away from China. Assam and Uttar Pradesh are already restructuring themselves in a way to create more jobs and welcome investment with open arms.

Sources have confirmed that many American, Japanese and Korean companies have decided to shift their production facilities from China to India. This is due to the adverse effect that the corona virus pandemic had on various industries which were forced close operations at the time of Chinese lockdown.

While China might have gone back to opening itself up, it does not hold the same grace for investment as it used to. India might still be winning a silent war after all.

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