India's PMO Plans to Boost Foreign Investments Amid West Asia Conflict
Containing war impact on growth, current account: PMO stitching up plan to boost foreign fund flow
The Economic Times
Image: The Economic Times
The Prime Minister's Office (PMO) of India is coordinating with various ministries to enhance foreign investments and exports while reducing non-essential imports in response to the economic fallout from the West Asia conflict. Key measures include easing regulations under the Foreign Exchange Management Act (FEMA) and promoting domestic manufacturing to substitute imports from China.
- 01PMO is actively coordinating efforts to boost foreign investments and exports.
- 02India's goods trade deficit, excluding petroleum and gems, stands at approximately $140 billion annually.
- 03Projections indicate India's current account deficit could reach 1.5% to 2.4% of GDP by FY27.
- 04Efforts are underway to ease FEMA regulations to attract foreign capital.
- 05Prime Minister Modi urges citizens to reduce consumption of petroleum products and bullion.
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The Prime Minister's Office (PMO) in India is spearheading initiatives to mitigate the economic impact of the ongoing conflict in West Asia on the country's growth and current account. Senior officials from the finance ministry are working to relax regulations under the Foreign Exchange Management Act (FEMA) and make bilateral investment treaties more favorable for investors. The country's goods trade deficit, excluding petroleum and gems and jewelry, is about $140 billion annually. To bolster exports and attract foreign capital, the PMO is exploring opportunities for domestic manufacturing to replace cheaper imports from China. Projections indicate that India's current account deficit could range from 1.5% to 2.4% of GDP for FY27, compared to 0.6% in FY25. Prime Minister Narendra Modi has called on citizens to reduce consumption of petroleum products, cooking oil, and bullion, which are significant contributors to the trade deficit. Additionally, discussions are ongoing to ease FEMA regulations to enhance equity investments from abroad.
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These measures aim to stabilize the economy by reducing the trade deficit, which could help maintain the value of the Indian rupee and prevent further economic strain on households.
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