Indian Economy News

FTAs, Lower Import Duties and Better Business Environment to Boost Net FDI Flows: ADB Chief Economist

Asian Development Bank (ADB) Chief Economist Mr. Albert Park stated that India’s continued efforts to expand Free Trade Agreements (FTAs), rationalise import tariffs and improve the overall business environment are expected to support stronger foreign direct investment (FDI) inflows into the country. India attracted net FDI of Rs. 2.88 lakh crore (US$ 38.6 billion) in FY22, which declined to Rs. 2.25 lakh crore (US$ 28 billion) in FY23 and further moderated to Rs. 84,435 crore (US$ 10.2 billion) in FY24. During the April-December period of FY26, net FDI improved to Rs. 26,514 crore (US$ 3 billion), indicating gradual recovery in investor sentiment and capital inflows. Continued tariff rationalisation, trade liberalisation and deeper integration with global supply chains are expected to improve India’s competitiveness as a preferred investment destination. Greater focus on strengthening manufacturing ecosystems through integrated industrial zones, logistics infrastructure and business-friendly facilities could further support investment expansion and industrial growth across sectors.

The discussion also underscored the importance of urban governance reforms, integrated city planning and infrastructure development in sustaining long-term economic growth and attracting global investors. Recent reforms undertaken by India, including labour and Goods and Services Tax (GST) reforms, were viewed positively in improving operational efficiency and ease of doing business. At the same time, the ongoing Middle East crisis and elevated crude oil prices may create inflationary pressures and impact Asia’s broader economic outlook. According to ADB projections, crude oil prices are expected to average US$ 96 per barrel in 2026 and remain elevated at around US$ 80 per barrel in 2027. Despite global uncertainties, India’s GDP growth is projected to remain robust at 6.9% in the current fiscal year, supported by strong domestic demand, infrastructure expansion and continued economic reforms.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.