In mid-April, a group of South Korean investors paid a visit to Sikkim, notwithstanding the rising Covid 19 cases in India. Their aim: to look for big investment opportunities in the state. It is not jist just Korean investors. Recently, after the European Union decided to freeze the Comprehensive Agreement on Investment (CAI) with China. Countries in the Eurozone could route some of their outlay to India.
As a belligerent China–the traditional darling for global investors loses its sheen—India, which has recently put in place the production-linked incentive (PLI) scheme, is seen to be gaining. Several companies are already in talks for possible brownfield as well as greenfield investments with Invest India, the nodal body under the Ministry of Commerce and Industry, facilitating fresh investment in the country.
Despite a severe second wave of Covid 19, India has held up its position as a favourite investment destination driven by a fast-changing geo-economic landscape. “The country is being seen as a credible alternative to China as an investment destination,” an analyst said, adding that most of the preparatory work is already underway.
A similar optimism about India as a global economic partner is also palpable in the United States.
In fact, when external affairs minister S Jaishankar met US corporate icons on May 27 , many showed keen interest to invest in India, overriding immediate Covid-19 concerns, the Hindustan Times reported.
Some of the key participants who met Jaishankar were: Ariel Mactavish, President, Medtronic Respiratory Inc; Ken Gilmartin, Executive Vice President Jacobs Engineering Group; Arvind Krishna, Chairman and CEO, IBM; Raj Subramaniam, President, FedEx; Julie Sweet, CEO Accenture; and Seifi Ghasemi, Chairman and CEO, Air Products.
“There is confidence that the situation (Covid 19 pandemic) will soon be under control as the vaccination drive gathers further steam. Domestic as well as foreign investors continue to be upbeat about India as an investment destination. The government is ready to further ease investment norms,” Gopal Agarwal, BJP’s spokesperson on economic affairs said.
The country’s total foreign direct investment (FDI) in 2020-21 stood at a record $81.72 billion compared to 2019-20.
An UNCTAD report published in January noted that though FDI flows into developing economies in 2020 decreased by 12 per cent to an estimated $616 billion, they accounted for 72 per cent of global FDI – the highest share on record.
The report added that the fall has been highly uneven across developing regions with a (-)37 decline in Latin America and the Caribbean, (-)18 per cent drop in Africa and (-) 4 per cent in developing countries in Asia. However, India besides China received the highest FDI in 2020.
“The Covid second wave has done some damage to the investor community but the good thing is that unlike many first world countries, India has managed to bring the situation under control within two months. This has once again given hope to the business community,” EY India’s chief policy adviser DK Srivastava said.