Simplistic to think Chinese investments will improve India's trade balance

Five important points worth further reflection with respect to the Economic Survey suggestion to promote FDI from China

In the ongoing debate on the suggestion in the Economic Survey 2023-24 to promote foreign direct investment (FDI) from China, the following points may be worth further reflection.

First, developed economies contribute the majority share of global FDI outflows, with the US and Japan in the lead. Four-fifths of the top 100 multinational corporations (MNCs) undertaking investments in manufacturing abroad are from Europe, the US and Japan. FDI outflows from China have been on the rise, in the last couple of years, with greenfield investments in critical minerals, global value chain (GVC)-intensive manufacturing sectors such as electronics,