India continues strong growth trend for foreign investment
India’s appeal to global investors remains strong, driven by a young and dynamic workforce and the government’s ongoing emphasis on initiatives like ‘Make in India’, government officials told the World Economic Forum (WEF) in Switzerland.
Speaking at the ‘FDI in India’ event, Amardeep Singh Bhatia, Secretary of the Department for Promotion of Industry and Internal Trade (DPIIT), noted the government’s success in liberalising foreign direct investment (FDI).
“More than 90% of our FDI is coming via the automatic route,” Bhatia said, underscoring the government’s commitment to attracting investments, particularly in manufacturing sectors that cater to both local and export markets.
Key areas for development for India include electronics and renewable energy, and sectors with high employment potential, such as textiles, footwear and pharma.
Neeraj Aggarwal, Asia-Pacific Chair at Boston Consulting Group (BCG), highlighted the growing opportunity for India in global manufacturing, supported by the country’s cutting-edge digital infrastructure, including the Unified Payments Interface (UPI), which has become a global benchmark.
“The other thing which is interesting is this whole shift to AI… India, which has historically had a strength in services, could benefit from this change,” Aggarwal told delegates.
However, while incentives are supporting India’s manufacturing ambitions, challenges remain. Sanjeev Krishan, Chairman of PwC India, pointed out the need for logistics and digital competitiveness improvements. He cited Malaysia and Indonesia as examples of countries excelling in these areas.
A recurring theme among panellists was the need for skill development to leverage India’s demographic advantage fully. “India’s demographic is India’s strength, and we need to harness it, which means there has to be a huge focus on skilling,” Krishan said. The focus on education and skills training is essential to meet the growing demand for a tech-confident workforce to cater to the needs of global companies.
The discussion also touched on India’s rise as a promising market, with Kartikeya Sharma, President of AB InBev India, noting the “exponential scale” of India’s growth potential.
In the real estate sector, Niranjan Hiranandani, Managing Director of Hiranandani Group, highlighted the impact of structural reforms that have made it easier to attract FDI. Hiranandani said the return on investment (ROI) in commercial real estate now surpasses that of the residential sector. He added that if more FDI and internal funds flow into the real estate market, India could see GDP growth accelerate from 6.5% to 10% in the next two years.
Global leader in technological innovation
Delegates at Davos also heard how India is emerging as a global leader in technological innovation and economic growth, recognized for its transformative journey as a start-up and digital innovation hub.
At the Swiss resort, the Centre for the Fourth Industrial Revolution (C4IR) India launched its six-year impact journey report on the inaugural day of the forum.
The report said: “The WEF’s partnership with India spans over four decades. It has fostered collaborative efforts across government, business, academia, and civil society. These partnerships have driven significant initiatives, including AI-driven agricultural programmes, healthcare solutions, and sustainable urban frameworks, resulting in tangible improvements for millions of citizens.
“C4IR India has made notable strides in addressing complex challenges through multi-stakeholder collaboration, improving livelihoods, and providing better access to essential services. With its initiatives now touching the lives of 1.25 million people, it is advancing agriculture, healthcare, and urban development technologies, setting benchmarks for the Fourth Industrial Revolution.
“Looking ahead, the Centre is focusing on cutting-edge areas such as AI, climate technology, and space technologies, with plans to expand its reach to 10 million citizens. Key projects like AI for India 2030, the Space Economy initiative, and the AVIATE (Aviation – Innovation Autonomy and Technology for Everyone) India initiative underscore India’s ambition to leverage technological advancements for societal good and position itself as a digital and innovation space leader.”
According to its Mission Statement, “the World Economic Forum is the International Organization for Public-Private Cooperation. It provides a global, impartial and not-for-profit platform for meaningful connection between stakeholders to establish trust, and build initiatives for cooperation and progress.”