Kyunghoon Kim, Head of the India and South Asia Team at the Korea Institute for International Economic Policy (KIEP), said India must maintain policy credibility and continuity to sustain FDI, as strong growth alone may not reassure investors. He praised India’s investment, trade and industrial policies for attracting FDI, citing first-quarter GDP growth of 7.8 per cent, services growth above 12 per cent, manufacturing growth above 9 per cent and foreign exchange reserves of around USD 730 billion. He cautioned that growth does not automatically create enough jobs, and that India needs enough skilled workers, while inflation rose from around zero per cent in October last year to 5.5 per cent in September this year. The central bank raised its policy rate by 25 basis points to 5.5 per cent, its first increase in nearly four years. Kim said India could grow around 7 per cent over the medium term and become the world’s third-largest economy by 2031 or 2032.
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