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Informist, Wednesday, Jul. 8, 2026

 

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--MPC Kumar: More global competition for FDI now; US arm-twisting partners for it
--CONTEXT: MPC member Nagesh Kumar speaks at FICCI event on investment
--MPC Kumar: Need to revisit our approach to attract FDI in current global context
--MPC Kumar: Should identify key sectors, invite global cos to bid for FDI
--MPC Kumar: See recent FTAs opening door to advanced mfg in India 
--MPC Kumar: Encourage govt to push investment into export-heavy sectors 

 

NEW DELHI – India must rethink its policy to attract foreign direct investment in a global environment which is more competitive than ever, Monetary Policy Committee external member Nagesh Kumar said. The government must be more proactive in bringing in FDI instead of relying on just liberalising policy, the director of the Institute for Studies in Industrial Development said. 

 

For this, the economist recommended the government to identify key sectors that would be suitable for FDI. India should then invite global companies to bid to invest into these sectors or particular companies. This could help India in an environment when even developed economies are looking to attract FDI, with the US arm-twisting partners for investment in the trade deals it signs.

 

Kumar was speaking at a seminar on investment economics organised by the Federation of Indian Chambers of Commerce and Industry. He batted for the government to push its own investment and direct FDI into sectors which are more export-dependent, continuing on the theme of the panel discussion which highlighted increasing export competitiveness. Latest Reserve Bank of India data showed net FDI inflow into India was $6.58 billion in April.

 

"I think focusing on export-oriented manufacturing sector, manufacturing investments, because they bring the latest technology and they are competitive right from the beginning," the MPC member said when asked what reforms the government should bring about. "And with proactive approach, we could possibly get more success."

 

The slew of free-trade agreements that the government has signed in recent years also augurs well for exporters as it levels the playing field with neighbouring countries such as Vietnam and Bangladesh, which benefitted from lower tariffs to the European Union in the past. As developed economies have lost their manufacturing edge, Europe with its large technology base can collaborate with India for advanced manufacturing.

 

The shared market and common labour pool can lower the cost of production and increase competition while European companies diversify their geographical risk by adding India to their "Plus one" strategies, Kumar said. India's free-trade agreement with the UK came into effect this month and with the European Union is expected to be operational before the end of 2026.  End

 

US$1 = INR 95.60

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Aaryan Khanna

Edited by Akul Nishant Akhoury

 

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