look news india
Mumbai: The victory of Donald Trump as President in America has indicated the possibility of impact on Foreign Direct Investment (FDI) in India. However, new areas for FDI in India are emerging which are expected to sustain FDI inflows in the event of US withdrawal.
According to a report by State Bank of India (SBI), the Trump administration in its previous tenure made several regulatory changes to attract investment in the US, which resulted in impacting FDI inflows into many countries of the world, including India.
If Trump is re-elected and re-implements his previous policies, it could make the situation challenging for emerging markets like India that depend on FDI for economic growth.
However, as India is diversifying its sources of FDI, it may be protected from the US policy.
India is no longer dependent on traditional sources for FDI and now FDI is coming in various sectors. India is also now receiving FDI in renewable energy, medical equipment, maritime transport services sectors.
India is witnessing FDI inflows into 12 emerging sectors. Therefore, the report said, any shortfall in FDI is likely to be offset by traditional sectors.
Any increase in tariffs by the US, restrictions on H-1B policy and strengthening of the dollar may result in short-term volatility in India’s trade and investment sector.
Despite tariff hikes during Trump’s first term, India maintained trade with the US, indicating India’s resilience in the export market.