Worries in India, flourishing abroad

Admittedly, the current socio-economic situation in India is growing worrisome by the day. However, it is not correct to perpetuate the discourse that whatever Prime Minister Narendra Modi does is wrong. Moreover, the opposition wants to drag the Prime Minister’s name into every controversy, irrespective of its weight or relevance to him. 

The Winter Session of the Parliament began on November 26. The Government has reached out to Opposition leaders in its bid to elicit support for key Bills. But the Opposition leaders have not left any stone unturned to criticise the government. The Prime Minister’s foreign trips are still a point of issue. He has been severely criticised on the eve of all his foreign trips. Any study into the efforts made by the heads of various developed countries will clearly show that there is really nothing unusual about Modi’s foreign trips. So far, he has spent around Rs 55 crores on his foreign tours.

Every time Modi visits any country, the volume is raised due to the attraction he holds among the Indian diaspora. Suffice to say, the Prime Minister has given India a renewed respectability in the world. Suffice to say, his visits have bolstered the flow of foreign direct investment. As a result, India has become the largest destination for foreign investment in the world.

Leaders from developed countries have made frequent foreign trips. Russian President Vladimir Putin tops the list by visiting 41 countries and staying 92 days abroad in the first 20 months of his tenure. United Kingdom’s Prime Minister David Cameroon is placed second at 41 countries and 71 days within the same time frame. Prime Minister Narendra Modi, meanwhile, has visited 32 countries and stayed approximately 80 days during his first 19 months in office. Clearly, the Prime Minister Modi’s numbers do not seem unusual. All the heads of developed countries see foreign visits as a means to expand their economic and geostrategic influence.  Prime Minister Narendra Modi is no different. 

Every visit by the Indian Prime Minister is concluded by meeting with business tycoons and the Indian diaspora. According to a report published by the World Bank this October, it has been estimated that NRIs may invest $72 Billion (US) in India. Such numbers reflect the impact of  Modi’s foreign visits. This figure is much more than that of China. So far, the rate of foreign investment in India was growing at a rate of 0.6 percent. However, after Modi’s foreign visits his emphasis on tagging along business with foreign policy, the rate of foreign investment rate has reached to 2.5 percent.

According to the World Bank, there are approximately 3 crore NRIs. They are well placed in different fields, namely engineering, medicine and other technical sectors. After close interaction with Modi, these NRIs have developed a faith in his vision for economic development. As a consequence, they have shown a real interest in investing in India. Modi has backed their faith by highlighting the government’s new reform measures such as the single window clearance system and greater expenditure on public infrastructure facilities.  It is fair to suggest that the Modi government has made it easier for foreign entrepreneurs to invest and do business in India.

No matter how much the Opposition criticises his foreign trips, it is evident that Modi has been able to convince the foreign and NRI business tycoons to invest in India. A report in the British news daily Financial Times states that India has already left China behind in terms of investment. “India is tracking well ahead of where it was at this time last year: it has more than doubled its midyear investment levels, attracting $30 billion by the end of June 2015 compared with $12 billion in the first half of last year,” the newspaper said. Till June 2015, India witnessed $31 billion (US) of FDI, whereas China saw only $28 billion in the same time period. Last year, China had received four times more FDI than India.

In the last couple of years, the amount of foreign direct investment received by China has come down due to its larger economic slowdown. Experts have, therefore, opined that India is becoming stronger among Asian countries, in terms of FDI. Hence, the regular foreign visits of Indian Prime Minister may yield results. It has been assessed that by 2019, India would receive $35 billion (US) from Japan, $20 billion from China, and $13 billion from the UK.

Many agencies in and outside India are keeping track of Modi’s foreign trips and analysing each move his government makes regarding FDI policy. Recently, in the second week of November, the Modi government eased FDI norms in 15 major sectors. According to Prime Minister Modi, FDI is not Foreign Direct Investment, but First Develop India. If everything goes well, as per calculations by the Government, then India’s GDP growth rate between 2016 and 2020 could reach 7.3 percent.

 

If the results Prime Minister Modi’s foreign visits are taken into account, then the allegations by opposition leaders seem frivolous. However, it remains to be seen, apart from the foreign policy and FDI, how the Prime Minister and his colleagues will address the worrisome situation in terms of price hike and inflation-related issues.