The dynamics of foreign direct investment (FDI) serve as a barometer of a country’s attractiveness and competitiveness. Amidst the shifting tides of geopolitics and supply chain diversification, India finds itself at a critical juncture, grappling with the implications of its FDI performance vis-à-vis the China-plus one strategy. As the world witnessed a seismic shift in FDI patterns, triggered by the decline in investments flowing into China, nations like the US, Canada, Mexico, Brazil, Poland, and Germany emerged as frontrunners in capturing a larger share of global FDI inflows.

Meanwhile, India’s trajectory paints a contrasting picture, with a significant decline in its FDI share despite concerted efforts to leverage the China-plus one narrative. The United States stands out as a prime example of capitalising on the opportunities presented by the changing economic landscape. Geopolitical tensions coupled with strategic investments in semiconductor manufacturing propelled the US to the forefront of FDI gains. The enactment of the CHIPS Act and the influx of investments from Taiwan underscore the strategic importance of reducing dependence on Chinese manufacturing hubs.

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In contrast, India’s journey towards attracting FDI has been met with formidable challenges. Despite commendable strides in sectors like mobile manufacturing, the country’s reliance on assembly line operations has proven to be a stumbling block in attracting substantial investment. The need for a robust and resilient supply chain ecosystem cannot be overstated, especially in industries characterised by intricate manufacturing processes. The allure of India as an investment destination remains undeniably strong, courtesy of its burgeoning consumer market, demographic dividend, and policy reforms aimed at enhancing ease of doing business.

However, translating these potential advantages into tangible FDI inflows demands a multifaceted approach encompassing structural reforms, infrastructure development, and strategic alliances. India’s quest for FDI supremacy necessitates a nuanced understanding of global economic dynamics and a proactive stance in addressing inherent bottlenecks. Embracing digitalization, fostering innovation, and bolstering industrial capabilities are imperative in positioning India as a formidable player in the global FDI landscape. Moreover, forging symbiotic partnerships with key stakeholders, including multinational corporations and international investors, holds the key to unlocking India’s full potential as a magnet for FDI. Collaborative endeavours aimed at fostering technology transfer, skill development, and sustainable practices can catalyse India’s journey towards becoming a preferred investment destination.

Amidst the evolving geopolitical landscape, India must also prioritise diplomatic efforts aimed at fostering a conducive environment for FDI inflows. Building robust trade relationships, enhancing diplomatic ties, and promoting multilateral cooperation can instil confidence among investors and mitigate geopolitical risks. By leveraging its soft power and diplomatic acumen, India can create an ecosystem that fosters trust and stability, thereby attracting sustained FDI inflows. While the China-plus one strategy presents both opportunities and challenges, India’s resilience and adaptability will determine its trajectory in the global economic arena. By embracing innovation, strengthening infrastructure, and fostering strategic partnerships, India can chart a course towards sustainable FDI growth and economic prosperity.