Make in India a success: Moody`s |
Moody`s has said that net foreign direct investment (FDI) inflows have hit an all-time high in early 2016, highlighting the success of Narendra Modi`s `Make in India` initiative. The ratings agency said that the FDI inflows have more than financed the current account deficit (CAD) for the first time since 2004. The rise in FDI points to stronger investor interest in India on the back of robust economic growth. Higher inflows also suggest that recent government policies, such as efforts to liberalize foreign investment limits in several sectors and the `Make in India` initiative, are bearing fruit. Net FDI inflows into India hit an all-time high in January 2016 at $3 billion on a 12-month moving average basis. India`s current account deficit is now more than covered by its FDI inflows. The basic balance (the sum of the current account balance and net FDI) returned to a surplus in 2015 after being in deficit from 2003 to end-2014.This is good news for the domestic currency whose value has been determined by capital flows due to the country`s permanent trade deficit. The only dark cloud has been the drop in remittances.
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