Lessons in Investment Promotion

Abstract

Foreign direct investment (FDI) can contribute significantly towards India reaching its aspiration of 8 percent growth per annum. Prior to 2009, India did not have a national dedicated organization with a specific mandate to promote and facilitate FDI. Invest India was then established, but it was not until 2015 that it was empowered to ramp up its investment promotion efforts, with the resources and reach to be fully active in the FDI marketplace. Invest India’s journey can be described against 9 critical success factors (CSFs) that chart how the agency responded to its challenges, to now deliver sustained success evidenced by facilitating USD 31 billion of FDI and direct creation of nearly 303,900 jobs. In part, Invest India has contributed to India’s stellar FDI performance in 2020, when the country reached another record of USD 64 million, against a global drop of 35 percent (UNCTAD 2021). While some challenges remain, Invest India’s journey provides valuable learnings for other investment promotion agencies (IPAs), which in the context of the Covid-19 crisis, will need to be in a period of review and reform.