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Informist, Wednesday, Nov. 19, 2025

 

--MPC Nagesh Kumar: India remains underperformer as a host of FDI
--MPC Nagesh Kumar:Increased outward FDI to help Indian cos expand footprint
--CONTEXT: MPC external member Kumar speaks at public policy event in Delhi 
--MPC Nagesh Kumar: Need to have new, updated industrial policy resolution 
--Nagesh Kumar: India has failed to take full advantage of existing FTAs 

 

NEW DELHI – There is a need for India to update its industrial policy resolutions, the latest of which are heavily outdated, said Nagesh Kumar, head of the Institute for Studies in Industrial Development. The aim of the new resolution should be to set targets such as doubling India's share in global manufacturing, the external member of the Reserve Bank of India's Monetary Policy Committee said.

 

"We need a guiding document to drive our industrialisation in the coming years because the industrial policy resolutions that India doctored in 1948, 1956, 1991 are all outdated for the current context," Kumar said at an event at the Delhi School of Economics Wednesday. "So, we need to have a new updated industrial policy resolution, which is seen by all policy makers, and the industry as a guiding document, which could set up some targets like doubling India's share in global manufacturing value...".

 

Kumar called for the new industrial policy resolution to create an institutional architecture for financing India's manufacturing sector. He also batted for recognising the importance of management of a competitive exchange rate, when it comes to the manufacturing sector. "Trade policy, investment policy, construction policy, exchange rate policy...everything comes under the curve of industrial policy," he said.

 

Kumar further said that foreign direct investment can be an important engine of building manufacturing capacity for India. However, India is still an under-performer in terms of FDI, and should be recieving more investment than it does currently, he said. Gross FDI into India fell to $6.05 billion in August from $11.11 billion a month ago and $8.72 billion a year ago, as per RBI data. However, gross FDI into India rose almost 19% on year to $43.76 billion in Apr-Aug.

 

Increased outward FDI will help Indian companies expand their global footprint, according to Kumar. FDI by Indian companies in their overseas joint ventures and subsidiaries fell 31% on month to $3.14 billion in October. 

 

Kumar further highlighted that India has failed to take full advantage of its free trade agreements with various nations, adding that the country is heavily dependent on just one market – the US - for exports. The US accounts for nearly 20% of India's total exports. In 2024-25 (Apr-Mar), India exported goods worth $86.51 billion to the US and had a trade surplus of $40.82 billion. "We need to push exporters to take advantage of existing FTAs. Of course, more FTAs will be useful, but the ones which are already there should be fully tapped," he said.  End

 

US$1 = INR 88.59

 

Reported by Pratiksha

Edited by Vandana Hingorani

 

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