FDI: Beyond the hype

Negligible inflows suggest the aspirational $100-billion target remains elusive

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S TECH GIANT Apple being asked by US President Donald Trump to desist from ramping up iPhone production in India for American consumers brings the spotlight back to the prospects for foreign direct investments (FDI) in the country.

The government has an aspirational objective of attracting $100 billion annually in FDI to boost the growth story. Apple's entry into India was a showpiece of its ability to attract investors who wanted to de-risk their exposure to the mainland due to Sino-US tensions. All of this has now changed with trade talks between Washington and Beijing with prospects of sharply lower reciprocal tariffs. Trump's comments come when we hoped to secure a bigger bite of Apple in supplying the US with India-made iPhones that entailed doubling the US tech giant's output in the country. The US President prefers this company to instead increase its manufacturing footprint in America. Not so long ago, he had also indicated that Elon Musk's plans to build Teslas in India would be "very unfair" to the US.