Kolkata: India is performing better than rival Asian economies and is well placed to secure higher overseas investment flows due to its attractive valuations and growth potential, central bank governor Sanjay Malhotra said Wednesday.
"Structurally, the Indian economy is very strong, very resilient, very robust... We are doing better than other economies," Reserve Bank of India (RBI) governor Malhotra said at the post-policy press interaction in Mumbai.
Also Read: Crude oil, remittances & exports: RBI spells out where the Iran war bites India
To be sure, overseas funds have consistently sold Indian financial assets lately, with FY26 marking the fourth year in the past five in which foreign portfolio investors (FPI) were net sellers in Mumbai-listed securities. Overseas investments have continued, however, into capital assets and new stock listings.
The central bank has projected a 6.9% real GDP expansion for FY27, which it believes positions India as one of the fastest-growing major economies despite external headwinds.
"The fundamentals of the Indian economy are on a stronger footing at the current juncture than in previous crisis episodes as well as relative to many other economies, providing it with greater resilience to withstand shocks," he said earlier in the day, after announcing the status quo in terms of policy rates.
Deputy governor Poonam Gupta said that India's relative attractiveness as an investment destination is going to increase this year because of three factors.
"One is that valuations have become more attractive... The exchange rate (which depreciated sharply amod the geopolitical crisis) makes investments into the country more attractive, and a higher nominal GDP growth will help with earnings as well," she said.
Also Read: RBI GDP outlook FY26: India retains FY26 GDP at 7.6%, sets FY27 growth at 6.9% as Iran war, oil risks mount
Between April 2025 and January this year, overseas players announced $65 billion worth of investment into greenfield projects in India as compared with $73 billion foreign direct investment during the same period last fiscal.
Top five greenfield FDI project announcements were in the fields of information technology and banking by Amazon, Microsoft, Google, General Catalyst and the MUFG Bank, reflecting investor optimism and a strong FDI pipeline.
Governor Malhotra expressed confidence that the economy can grow 6.9% despite the external shocks because the various fiscal and monetary policy measures taken by government and RBI will continue to drive growth on one hand and keep the price pressure under control.
The RBI has projected headline inflation measured by Consumer Price Index at 4.6% for FY27, well within the upper tolerance level of 6%. The first quarter inflation is projected at 4%.
"So, it's quite possible that we continue to have low rates even amid external shocks," the RBI governor said.
"Structurally, the Indian economy is very strong, very resilient, very robust... We are doing better than other economies," Reserve Bank of India (RBI) governor Malhotra said at the post-policy press interaction in Mumbai.
Also Read: Crude oil, remittances & exports: RBI spells out where the Iran war bites India
To be sure, overseas funds have consistently sold Indian financial assets lately, with FY26 marking the fourth year in the past five in which foreign portfolio investors (FPI) were net sellers in Mumbai-listed securities. Overseas investments have continued, however, into capital assets and new stock listings.
The central bank has projected a 6.9% real GDP expansion for FY27, which it believes positions India as one of the fastest-growing major economies despite external headwinds.
"The fundamentals of the Indian economy are on a stronger footing at the current juncture than in previous crisis episodes as well as relative to many other economies, providing it with greater resilience to withstand shocks," he said earlier in the day, after announcing the status quo in terms of policy rates.
Deputy governor Poonam Gupta said that India's relative attractiveness as an investment destination is going to increase this year because of three factors.
"One is that valuations have become more attractive... The exchange rate (which depreciated sharply amod the geopolitical crisis) makes investments into the country more attractive, and a higher nominal GDP growth will help with earnings as well," she said.
Also Read: RBI GDP outlook FY26: India retains FY26 GDP at 7.6%, sets FY27 growth at 6.9% as Iran war, oil risks mount
Between April 2025 and January this year, overseas players announced $65 billion worth of investment into greenfield projects in India as compared with $73 billion foreign direct investment during the same period last fiscal.
Top five greenfield FDI project announcements were in the fields of information technology and banking by Amazon, Microsoft, Google, General Catalyst and the MUFG Bank, reflecting investor optimism and a strong FDI pipeline.
Governor Malhotra expressed confidence that the economy can grow 6.9% despite the external shocks because the various fiscal and monetary policy measures taken by government and RBI will continue to drive growth on one hand and keep the price pressure under control.
The RBI has projected headline inflation measured by Consumer Price Index at 4.6% for FY27, well within the upper tolerance level of 6%. The first quarter inflation is projected at 4%.
"So, it's quite possible that we continue to have low rates even amid external shocks," the RBI governor said.
