The further slump in net foreign direct investment (FDI) inflows into India in Q1 seems in large part a reflection of higher global interest rates. One implication therefore is that the slump will reverse as global monetary policy turns more dovish. And FDI inflows into India could rise strongly over the coming years as global economic fragmentation becomes an increasingly important factor in the decision-making of foreign firms. The big unknown in all of this is of course the impact of a second Trump presidency.
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