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1 month ago
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Summary
Amid a pall of gloom cast by stock market outflows and a sliding rupee, India's FDI outlook has brightened as Amazon and Microsoft commit billions to our economy. Last year’s crash in net FDI will hopefully end up as no more than a blip.
Outflows of “hot money” from India’s stock market and a fast weakening rupee may have caused some anxiety this year, but the outlook on foreign direct investment (FDI) has brightened.
On Wednesday, US-based Amazon promised to invest $35 billion by 2030 to expand its operations in India, with its AI capabilities and an export thrust in focus. A day earlier, Microsoft had unveiled a plan to invest $17.5 billion over four years starting 2026, with data centres for AI as one of this project’s pillars.
Regardless of the rhetoric, this needn’t help India leap ahead in the field of AI, for which we need our own R&D, although osmotic effects could spell local gains. That said, all FDI is welcome for the local commerce it stirs and jobs it generates. Amazon, for example, promises a million new jobs.
New commitments should also ease worries over a slump in net FDI, which dropped below the $1 billion mark in 2024-25. This year should see a recovery, as Reserve Bank of India Governor Sanjay Malhotra recently pointed out, thanks to a fall in repatriation even though outward FDI rose. With Big Tech looking India’s way, last year’s dismal showing will probably turn out to be a blip.
English (US) ·