- A possible US-Iran peace deal may ease India’s oil and energy pressure temporarily.
- However, experts say India still faces deeper problems related to capital investment and innovation.
- India heavily depends on the Strait of Hormuz for oil, cooking fuel, and fertilisers.
- The West Asia crisis worsened India’s shortages of capital and new ideas.
- India has struggled to match East Asia’s success in manufacturing exports.
- The country relies heavily on foreign investment to manage its trade deficit.
- Indian households and institutions ended up buying these shares while foreign investors took money out.
- India is lagging behind countries like China, South Korea, and Taiwan in artificial intelligence innovation.
- Experts say India’s tech ecosystem is focusing more on data centres than creating original AI technologies.
- Domestic IT outsourcing firms may face pressure from global AI tools like Claude and Codex.
- Around six million Indian programmers are facing uncertainty and slower growth opportunities. Foreign direct investment (FDI) inflows have sharply declined in recent years.
- Net FDI dropped from $56 billion in FY2020 to about $29 billion during the first nine months of the last financial year.
- Indian companies are also investing more money abroad, reducing net capital inflows further.
- Foreign investors sold nearly $32 billion worth of Indian market investments over the past year.
- India lacks a strong structural advantage like Brazil’s commodity exports or South Korea’s semiconductor industry.