India faces a significant challenge with a slowdown in foreign direct investment (FDI), with FDI equity inflows declining by 22% year-on-year to $46 billion in 2022-23. While the overall FDI growth declined by 16% to $71 billion, the situation looks slightly better when considering reinvested earnings and other capital forms. However, the finance ministry acknowledges the issue, attributing it partly to a rise in repatriation of investment. The slowdown in FDI growth is not recent, with trends showing a decline since 2016-17. Factors such as uncertainties in tax regimes, bureaucratic hurdles, difficulties in contract enforcement, and neglect of free trade deals contribute to foreign investors’ hesitancy towards India, according to corporate economist Ritesh Kumar Singh.
India Grapples with Declining Foreign Direct Investment Amidst Economic Challenges
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