Moody’s gives thumbs up to Make in India as FDI on all-time high

Ratings agency Moody’s said PM Narendra Modi’s ‘Make in India’ initiative is bearing fruits and there is ample proof.

Moody’s stated the net Foreign Direct Investment (FDI) inflows hit an all-time high at $3 billion in early 2016 since 2004.

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.

"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," stated the ratings agency in its report.

Moody’s said that development initiatives such as building industrial corridors, setting up investment & manufacturing zones and smart cities will further enhance investment inflows.

"In particular, flows into the manufacturing sector are likely to accelerate as the government seeks to boost the sector's share of gross domestic product (GDP) to 25% by 2022," the report added.

"The strength of inflows reflects India's relatively strong growth prospects and government efforts to liberalize foreign investment regulation.
We expect FDI inflows to continue to rise. Increasing FDI flows provide a stable source of financing that will help to mitigate India's external financing risks," the ratings agency said in a statement.