“US Trade Agreements as a Catalyst for FDI Inflows in India: An Analytical Study”

Abstract

Geopolitical alignments and an increasing proportion of services in global FDI are driving a structural shift of the global FDI landscape (Casella et al., 2024). With the G20-Emerging Market (G20-EM) countries' share of worldwide FDI outflows rising from 9.7% in 2009 to 16.5% in 2023; EMEs are becoming a significant source of foreign investment.

 India's foreign investment has grown dramatically in line with these trends, especially in the post-pandemic era. A trend towards developed economies has also been observed in India's outbound investment, with the average share increasing to 51.1% between 2019 and 2024.

Foreign Direct Investment (FDI) is a critical driver of economic growth for developing and developed economies alike. It involves cross-border investment where an investor acquires lasting interest (usually ≥10% equity) in a company abroad, bringing capital, technology, and managerial expertise. FDI plays a significant role in international trade, job creation, and technology transfer.
India-US officially reached a significant trade deal, both countries agreed on significantly reducing reciprocal tariffs on Indian goods from 50% to 18%. This agreement aims to boost bilateral trade. Read more about to know the key updates, significance and challenges ahead.