India needs $100 bn in annual FDI: Amitabh Kant lays out reforms to win global investment race

India needs to attract at least $100 billion a year in net foreign direct investment (FDI) and deepen its participation in global value chains (GVCs), according to Amitabh Kant, former CEO of NITI Aayog. In a post on X, Kant said India’s external buffers remain strong, but sharp bouts of rupee depreciation expose a structural vulnerability that can be addressed by attracting stable FDI and expanding exports.

Kant argues that India needs to move beyond short-term capital flows and focus on stable, long-term foreign investment. A sustained increase in FDI can strengthen the productive capacity of the economy, create jobs and integrate Indian companies more deeply into international supply chains.

But attracting $100 billion a year will require significant reforms, he said. India is competing with other emerging economies for global investment, and investors can shift manufacturing and supply-chain commitments to countries that offer lower costs, easier market access and greater policy certainty.

Keep inputs globally competitive

One priority, according to Kant, is to ensure that inputs used by Indian manufacturers remain globally competitive. High input costs can undermine the competitiveness of Indian exports and make the country less attractive as a manufacturing base.

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Kant also called for reducing customs friction. Faster and simpler movement of goods across borders can lower transaction costs and make Indian production more integrated with global supply chains.

Greater market access

Expanding exports is another critical part of the strategy. Kant argues that India needs to build market access so that companies investing in the country can serve both the domestic and international markets.

This becomes particularly important as multinational companies diversify their supply chains. India has an opportunity to attract more manufacturing investment as businesses look to build resilient and geographically diversified production networks.

Compete for global value chains

Kant says India must compete “relentlessly” for anchor GVCs—large companies and supply chains that can bring supporting businesses, technology and investment along with them.

He also argues that India should prioritise scale before premature localisation. Building large, globally competitive production ecosystems, rather than attempting to localise every component immediately, could help Indian manufacturers become more competitive.

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Policy predictability is crucial

For global investors, reforms are not limited to taxes, tariffs or infrastructure. Policy predictability is equally important because large manufacturing investments typically involve long-term commitments.

Kant’s broader message is that India needs to compete with other investment destinations through “speed, certainty and persistence.” Attracting $100 billion in annual net FDI, he argues, will require coordinated reforms that reduce costs, improve market access, facilitate trade and give investors greater confidence about the policy environment.

For India, the global investment race is therefore not simply about attracting more capital. It is about creating the conditions that make global companies choose India as a long-term production and export base.

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