India eyes US$100 billion annual FDI from investors looking to diversify from China

“Our target is that we will average at least US$100 billion over the next five years. The trend is very positive and upward,” Rajesh Kumar Singh, secretary in the Department for Promotion of Industry and Internal Trade, told Bloomberg in an interview in New Delhi.

India, as the world's fastest-growing major economy, is eyeing businesses looking to diversify their operations amid geopolitical uncertainties, often referred to as a "China plus one" strategy.

The ambitious target contrasts with an average annual FDI of over US$70 billion in the five years leading up to March 2023 and marks a departure from the trend observed after last year's decline.

Singh suggested that the current fiscal year's figure will be "approaching" the US$100 billion objective.

Companies such as Apple and Samsung Electronics have expanded their manufacturing presence in India, capitalizing on incentives provided by Prime Minister Narendra Modi's administration through the Product Linked Incentive (PLI) scheme.

However, foreign investment hasn't kept pace with the growth in local manufacturing.

Singh cited higher inflation and interest rates in developed nations, as well as geopolitical conflicts and risk perceptions surrounding emerging markets as reasons.

India has “unmatched market growth opportunity in a variety of sectors such as electric vehicles, electronic goods or general consumer goods, where penetration levels in our population are far lower than the global average,” he said in the interview with Bloomberg on Thursday.

He expressed the government’s strong commitment to take more steps to ease FDI rules.