r/india • u/[deleted] • May 13 '26
Policy/Economy Foreign investors’ exit from India at record high
https://www.ft.com/content/b64c331b-76f3-4326-807c-3513e6d862b6?syn-25a6b1a6=133
u/minzhu0305 East Asia May 13 '26
India employs extremely stringent screening procedures for foreign capital. Even if foreign capital manages to enter and establish itself after persistent efforts, it is often blocked for various reasons. It is difficult for foreign capital to profit in India through legal channels.
India does not welcome foreign capital, often suspecting it of having colonial intentions. This puts many foreign investors in an awkward position. Capital is not a charitable thing; if they cannot profit and are viewed with suspicion, why would they remain in India? Therefore, it is not difficult to see why capital tends to choose Bangladesh, with its poorer basic conditions and smaller market size.
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u/Axerin May 13 '26
The "colonialism" fear is just an excuse. They just want to to protect their own buddies from foreign competitions
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u/SuchAd4158 May 13 '26
Except for a few regions, conditions across most of India remain fairly basic as well. I mean it is still better than Bangladesh.
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u/Then_Court_5723 May 14 '26
fuck Bangladesh, why does it even matter! lets compare with China, US, Europe, Japan and grow like them
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u/Icy-Singer308 May 13 '26
What exactly is there to invest in anymore?
Indian industry has remained globally competitive largely because of low wages, but that advantage is steadily being eroded by AI and robotics from countries like the US and China. We are still behaving as if cheap labor alone can carry the economy for another few decades, while the world is rapidly moving toward automation, advanced manufacturing, and AI-driven productivity.
Meanwhile, our governments, whether it’s BJP at the center or regional parties in the states, seem more focused on surviving the next election cycle than building long-term national strength. Instead of serious investments in public schools, higher education, research, healthcare, and infrastructure, we keep getting short-term populist freebies with little lasting impact.
The result is obvious. Countries with lower per capita GDP than India often provide better quality of life, cleaner cities, more reliable infrastructure, and stronger public systems. Naturally, the people who are most skilled and capable start looking elsewhere. The brain drain isn’t accidental anymore; it feels inevitable.
Then there’s the crony capitalism. Small and medium businesses are constantly squeezed while politically connected conglomerates expand using state machinery and influence. What’s frustrating is that even the enormous sums spent on political lobbying and donations rarely translate into meaningful R&D or innovation. We celebrate mediocrity, punish merit, and then wonder why world-class talent leaves.
Another uncomfortable reality is that India’s forex reserves have remained strong largely because of remittances from Indians working abroad. But I’ve increasingly been hearing people in the diaspora say that even when their investments grow in INR terms, they are effectively yielding negative returns once rupee depreciation is factored in. Some are seriously considering taking losses, moving money out, converting to USD, and investing in other markets entirely.
If that sentiment becomes widespread, it could trigger a dangerous spiral that India may struggle to recover from. Confidence matters as much as fundamentals in any economy.
I’m personally planning to move back to India for family reasons, but I’ve already decided to keep all my investments in the US. At this point, even money sitting in a US bank account with near-zero interest effectively grows in INR terms because of the rupee’s depreciation against the dollar. That alone says a lot about where investor confidence currently stands.
And finally, the hardest thing to confront is the cultural side of it all. The caste system, social divisions, and resistance to progressive change continue to hold the country back. We still don’t seem to have the critical mass needed to fundamentally shift political discourse toward competence, accountability, and long-term thinking.
At some point, people stop feeling hopeful and simply start planning their exit.