India’s foreign direct investment inflows remain robust, which could be key driver for the country’s economic growth and productivity increase over the medium term, notes Goldman Sachs.
Tushar Poddar of Goldman Sachs Research in his August 17, 2015 research note titled: “India Views: Better macro data” revised his 3,6 and 12 month forecasts for the INR to 64.5, 65, and 65, after the impact of the surprise CNY depreciation last week.
India holds strong FDI pipeline
Poddar points out that the recent announcement by a large Taiwanese manufacturer to invest $5 billion in Maharashtra is significant as this is precisely the kind of FDI that India needs to move labor from low productivity agriculture to higher productive and labor-intensive manufacturing. He notes the recent announcements indicate the FDI pipeline remains strong. The analyst notes inflows from the increase in FDI limits in insurance are also coming through with a large global insurance company announcing an increase in its stake with a local partner over the weekend.
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