India’s foreign investment problem may be bigger than it looks. In this episode of The Core Report Special Edition, Financial Journalist Govindraj Ethiraj speaks with Ajay Shah, Senior Research Fellow and Co-founder of XKDR Forum, about why foreign investment in India has slowed, why FDI flows have struggled to regain their earlier momentum, and what this could mean for India’s economic growth.Ajay Shah argues that the real question is not whether foreign capital is coming into India, but how much more investment India could be attracting. He points to a longer-term slowdown in both foreign direct investment and foreign portfolio investment and examines why global investors may remain cautious about committing substantially more capital to India.The conversation explores six major issues that Shah believes are holding back foreign investment in India, including capital controls, taxation, bilateral investment treaties, trade barriers, financial market infrastructure and the rule of law.Shah also explains why foreign capital matters for the Indian economy. Beyond funding, foreign companies can bring technology, management practices, global supply chains and knowledge that can improve productivity, manufacturing and competitiveness.Govindraj Ethiraj and Ajay Shah discuss FDI in India, FPI, FEMA, SEBI, taxation, tariffs, global value chains, contract enforcement, private investment, industrial policy and India’s economic reforms. They also explore why Shah considers the period from 1991 to 2011 crucial to India’s economic growth story and why both foreign and domestic private investment appear to have lost momentum since then.At the heart of the conversation is a bigger question. If India wants faster GDP growth, more manufacturing, more jobs and deeper integration with the global economy, what needs to change for global investors to put substantially more money into India?Chapters:01:25 What’s Driving Foreign Capital Away? 03:50 Why Has Foreign Capital Struggled to Scale in India?07:31 Why Are Some Companies Still Investing in India? 09:51 How Easy Is It to Enter and Exit India? 13:20 Is India’s Capital Problem Both Inward and Outward? 15:00 Why India’s Tax Regime Concerns Foreign Investors 19:19 How the Indian State Affects Foreign Firms 23:36 Do Trade Barriers Discourage Foreign Capital 25:04 How Should India Position Itself Globally? 26:19 Why Are Tariffs Rising and Falling Again? 27:23 Why Are Tariffs Rising and Falling Again? 28:28 Why Capital Gets Stuck After Entering India 30:30 Why Transactional Efficiency Isn’t Enough 31:50 How Should India Tackle Round-Tripping? 34:51 What Institutions Does India Need to Strengthen? 36:57 How Can India Become More Competitive? 40:27 How Important Is Private Capital to India? Watch the full conversation for a deeper understanding of India’s foreign investment problem, foreign investment in India and the future of FDI in India.India’s foreign investment problem goes beyond slowing FDI in India. Why are global investors cautious about foreign investment in India, and what must change? Ajay Shah explains how FDI, FPI, taxation, tariffs, private investment, manufacturing, economic reforms and the rule of law could shape India’s economic growth.#ForeignInvestment #FDIIndia #IndianEconomy #EconomicReforms #IndiaGrowth #TheCoreReport #TheCore
