India's ambition of becoming a developed economy and sustaining 8% annual growth may depend far more on foreign capital than policymakers admit.
In this insightful analysis, Debashis Basu explains why India needs nearly US$90 billion in net foreign capital every year to bridge its investment gap, support economic growth and avoid periodic currency crises. He examines the sharp fall in the rupee, the widening current-account deficit, weak FDI inflows, foreign portfolio outflows and policy decisions that may have discouraged capital from entering India.
Why is India running deficits in both its current and capital accounts? Why has the rupee weakened so sharply? And can the dream of Atmanirbhar Bharat be achieved without attracting significantly more foreign investment?
Watch this video to understand the economic realities behind India's growth ambitions and the challenges policymakers must address.
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