New Delhi : Economic research institute GTRI has said that strategic reforms are needed to attract more global investors towards India. It says that despite having abundant potential, FDI figures show that the country has not fully taken advantage of its opportunities.

Need to increase FDI

The Global Trade Research Initiative (GTRI) has suggested a four-stage plan to establish India as a leading choice for foreign investors. GTRI said the government should reduce cost disadvantages for companies coming to the country, improve the ease of doing business across the business cycle and establish a framework for evaluating investment proposals.

What do the figures say?

India attracted foreign direct investment (FDI) of $44.4 billion in the financial year 2023-24, which is only 1.1 per cent of its gross domestic product (GDP). The economic research institute said that the World Development Report 2023 mentions that the country is far behind countries like China (USD 189.1 billion), Brazil (USD 86.1 billion), Australia (USD 61.6 billion) and Canada (USD 52.6 billion).

GTRI suggested that India should offer a more competitive cost structure to attract businesses relocating from China or considering alternative production locations. For this, India needs to focus on four cost-related components: labour, input materials, energy and finance costs.

Need to provide cheap loans.

Finance costs are the highest in India. Loan rates here are around 9 to 10 per cent, while interest rates in China are around 4 to 5 per cent. In Vietnam, rates are around 7 to 8 percent. GTRI founder Ajay Srivastava said that the government needs to pay attention to these costs and try to be the most cost-effective option.