As a testament to growing confidence in the Indian economy, foreign direct investment flows in the past 12 months have hit record highs, crossing $50 billion for the first time.
This inbound surge, however, has been dampened somewhat by a fall in exports, illustrating that global consumer markets remain choppy at best. This has raised some concerns in New Delhi about the knock-on effect to its ambitious Make in India programme.
Prime Minister Modi came to power on the promise of ‘jobs, jobs, jobs’. Therefore though inbound investments, especially in infrastructure projects, should lead to a fillip in job creation. What the government will want is the manufacturing sector to get going too. Depressed oil prices affecting traditional markets such as the Middle East, uncertainty over Brexit in Europe, the US presidential elections are all global contributing factors. And at home, further pressure will come on the Reserve Bank of India (RBI) to reduce high commercial borrowing rates and also annual prayers for a great monsoon.
Modi economics appear to be turning favourably. He will now be thinking, only if exports start pumping – the promised good days (‘Achhe Din‘) are on their way.
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