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Asian Development Bank Says FTAs and Lower Duties Can Boost Foreign Investment in India
ADB Chief Economist Albert Park has predicted that free trade agreements and reforms in India will increase net foreign investment. However, he also warned of a slowdown in GDP growth and rising inflation due to the West Asian conflict.
According to the Chief Economist of the Asian Development Bank, Albert Park, net foreign investments in India will be promoted due to free trade deals, decreased taxes on imports, and improved business conditions. India experienced net foreign investments of $38.6 billion in 2021-22, followed by a reduction to $28 billion in 2023, and then to $10.2 billion in 2024.
Net foreign investments (foreign investment inflows less foreign investment outflows) are projected to reduce to around $1 billion in 2025. However, it increased to $3 billion during the April-December period of fiscal year 2026. Park said, "West Asia is slightly more vulnerable to conflict shocks than other parts of the world."
Praising India's reforms, including labor reforms and the GST, Park said India should continue this momentum. Regarding the outlook for crude oil prices, Park said, "With higher oil prices expected, our average for 2026 is $96 per barrel based on the new scenario.
