New Delhi, July 13 -- A general sense of despair pervades the universe of foreign direct investment (FDI), with flows from one country to another ebbing markedly in 2024. Three separate reports have independently lamented the sharp fall in FDI and concluded that this decline spells trouble particularly for developing countries, which are dependent on foreign investment for enhancing industrial capacity, upgrading infrastructure, modernizing technology and expanding their stock of renewable energy assets. All four factors are critical for economic growth, apart from reducing dependence on fossil fuels.

Waning FDI flows hold critical implications even for the Indian economy, specifically due to the rising tide of outflows and Indian indust...