Abstract
In recent years, one of the most noteworthy events experienced by the Indian economy is the large-scale withdrawal of foreign capital. In 2023, a total of 2,783 foreign enterprises exited the Indian market, with divested capital aggregating to 2 trillion rupees. While foreign direct investment (FDI) has consequently increased on a territorial basis, there has been a steep decline in Indiaʼs FDI inflows to USD$28.163 billion in 2023 from its peak of USD$64.072 billion in 2020. This indicates some relationship between territorial rise or fall and regional factors. This article delves into the collapse of foreign capital in India, exploring the causes and offering benchmarks on how to address these circumstances. The analysis will cover various perspectives, including infrastructure development in India, lack of policy clarity for foreign investors, poor legal conditions, and socio-political factors, to identify the main reasons behind the cessation of foreign investments. Additionally, this article aims to provide both theoretical and practical guidance for formulating Indiaʼs future economic policies by comparing the flow of investment into India with other emerging economies like China.
Published Version
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