Main Factors Helping India Become the “Wind Eagle” to Attract FDI Amid the Trend of Production Shift from China

Abstract

Since Prime Minister Narendra Modi took office in 2014, India has emerged as one of the world’s top destinations for foreign direct investment (FDI). Currently, the impact of the US-China power competition in the Indo-Pacific region is becoming increasingly unpredictable and complex, and multinational investors and companies are tending to shift their production chains out of China, in which India is the country that benefits the most from this process. This study aims to explore and analyze the key factors that have helped India generate strong attraction for foreign investors in the context of the current superpower competition. The article uses a qualitative analysis method through the analysis of secondary data sources, which shows that there are four main factors contributing to India’s current success: (1) abundant and cheap young workforce, especially in the information technology sector; (2) large consumer market with a rapidly growing middle class; (3) India has a stable political and macroeconomic environment; (4) economic reforms and infrastructure efforts by the Indian government under Prime Minister Narendra Modi. The research results have significance in identifying India’s key competitive advantages that make it an attractive destination for foreign investors; providing practical evidence on the key factors determining India’s FDI attraction; and providing useful information about the business environment, market potential and competitive advantages of India in the current context.

Received: 11 March 2024 / Accepted: 23 August 2024 / Published: 05 September 2024