India needs $8 trillion of gross capital formation in greenfield assets to become a $5 trillion economy by FY27, a report by Deloitte said. To achieve this, the economy will need at least $400 billion, cumulatively, over six years, in foreign direct investment, it said.
It said the country can target attracting greater FDI into seven capital-intensive sectors—Textile & Apparels, Food Processing Industry, Electronic Goods, Pharmaceuticals, Vehicles & Parts, Chemicals & API, and Capital Goods—that have contributed $181 billion of merchandise exports in FY21.
According to Deloitte, India can target an additional $1 trillion of merchandise exports in the next five years by attracting higher FDI into capital investment-led focus sectors through schemes such as Product Linked Incentives (PLI).
The accompanying survey on India’s FDI opportunity showed that 44 per cent of the respondents across the US, UK, Japan, and Singapore said they were planning additional or first-time investments in India.
Significantly, among first-time investors, nearly two-thirds are planning investments in India within the next two years. Not many are aware of the recent measures taken by the government on ease of doing business, but when told about them, the investors were keen to invest in India. As many as 300 business leaders were surveyed in the US, UK, Japan, and Singapore each.