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Foreign investment needs policy credibility beyond India strong GDP growth

Kyunghoon Kim of the Korea Institute for International Economic Policy (KIEP) says India must strengthen policy credibility and continuity to keep attracting foreign direct investment, since strong growth alone may not reassure global investors. He praises India's investment, trade and industrial policies, citing production-linked incentives and the India Semiconductor Mission, and notes first-quarter GDP growth of 7.8% supported by investment, consumption and exports. Kim highlights foreign exchange reserves of around USD 730 billion and says free trade agreements with the UK and EU could help over the medium term. He warns that growth does not automatically create enough jobs or higher incomes, and questions whether India has enough skilled workers. He also flags inflation rising to 5.5% in September, alongside a 25-basis-point rate increase to 5.5%, the first in nearly four years.

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