India, Jan. 6 -- Most experts are surprised that net inflows of foreign direct investment (FDI) have declined to near-nothing. A few see this as a strong point for the economy. According to them, the reason for this trend is because Indian firms invest huge amounts to start greenfield projects overseas, or take over foreign companies. This implies that Indian businesses have emerged as the new MNCs, and can compete with the global firms. This augurs well for the manufacturing and services sectors. Higher investments abroad mean that Indians are more confident, and have the cash flows to buy overseas firms.

However, many analysts feel that the reason for the low, or near-zero, net FDI is because of the flood of IPOs (Initial Public Offeri...