Monday, June 1, 2026
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The geopolitical upheavals since the launch of Operation Epic Fury on February 28 have brought out India’s stark dependency on fuel imports, critical supply chain raw materials, and the “fickleness” of private capital. To be sure, this isn’t the first time that the world (and India) has witnessed this state of affairs as evidenced by numerous such events — both related to energy security as well as financial stability — over the last few decades. Moreover, to India’s advantage, the macroeconomic fundamentals are in far better shape than on the cusp of all such past global crises. Nevertheless, India needs to confront the myriad economic challenges precipitated by this latest disruption with short- as well as long-term measures.
‘FDI trajectory: Gross FDI since 2021 has remained steady and crossed $80 billion in three of the last five years (including FY26). However, net FDI in FY26 was a mere $6.3 billion, indicating a steadily increasing outflow from exits of previous investments and outbound FDI by Indian companies. While successful and profitable exits by foreign investors are actually a positive factor, the increasing trajectory of outbound FDI could signal derisking impulses of ultra-high net worth individuals and Indian corporates.
By Sudhir Kapadia, Senior board advisor and former President, Bombay Chamber of Commerce and Industry
