The Modi government has also been looking into the foreign investment into the country that is estimated to witness an inflow of over $60 billion. America will be looking to make the most of this new opening which expects a 100 percentage FDI in India.
Studies done by Assocham shows that there will be a higher influence of FII, foreign institutional investment, over FDI in the current fiscal, compared to the previous years. The task of controlling and also strengthening the value of rupee will be a difficult one to the RBI and the financial minister. They will also have to work towards improving the current account balance.
Britain also hopes to revive their current flow of investments through the FDI freedom in India and also hope to have better ties. A country that once colonized India will have its history as the greatest hurdle in securing good relations. Britain will hope to look for an economic revival from India as they still are one of India’s biggest investors.
The Assocham study also found that the Indian FII inflow will continue to outpace emerging economies but will not affect the U.S. federal bank. Assocham President said “if the Modi government is able to take some reforms–friendly measures with taming inflation and earning the goodwill of the people, then FDI will do fast to catch up with the FII inflow.”
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