Page 11 - CII-ARTHA

MARCH 2026

The Investment Flywheel A Geographic Truth:

Expand the Map
Countries that sustain inflows of high-quality international
capital build a flywheel. India’s next upgrade is to make India’s investment geography remains concentrated.
that flywheel reliable across sectors and states.
According to the DPIIT data for FY2024-25,
Maharashtra attracted 39 per cent of the country’s
Entry total FDI equity inflows, followed by Karnataka (13 per
cent) and Delhi (12 per cent). Gujarat, Tamil Nadu,
Most global investors can price commercial risk; what Haryana, and Telangana account for most of the
they struggle with is uncertainty. A stable, legible rulebook remainder. Together, these seven states capture the
- particularly for taxation and regulatory interpretation - overwhelming majority of foreign capital.
often matters more than incremental fiscal incentives. The
strongest signal India can offer is consistency. Investors cluster where execution is predictable -
where land is available, approvals are time-bound, and
local administration is responsive. India’s next wave of
manufacturing and infrastructure investment requires
Enablement an explicit effort to expand that map: measurable

service standards for land readiness and clearances,
The after-entry experience is the real investor story. It is contract enforcement, logistics reliability, and aftercare
judged by the predictability of approvals, the stability of
compliance, and the reliability of counterparties. India has for large investors.
made progress on entry facilitation; the next phase is to
institutionalise aftercare as a policy discipline.
Infrastructure and
Long-duration Capital

Scale If India wants to crowd in stable institutional capital at
scale from pensions, insurers, and sovereign funds,
International capital scales fastest where it sees infrastructure is the most scalable channel. The priority
repeatable platforms with standardised documentation is building pension-grade investable platforms:
and governance. Strategic manufacturers want broadening PPP participation beyond roads and select
ecosystems where suppliers, logistics, utilities, and talent
scale alongside production. power segments, making the concept of asset
monetisation a delivery programme, and strengthening
bankability through regulatory clarity and credible
dispute resolution.
Exit and Reinvest

Orderly exits are capital recycling, not capital flight. In global investing, speed and
A system that enables smooth, rule-based exit creates certainty stand out as decisive
confidence for new entries and, over time, lowers the advantages, examined
economy’s cost of capital. meticulously by investors

Long-duration capital can underwrite commercial risk;
it prices policy and counterparty risk heavily.
Bankability improves when concession frameworks are
stable, risk allocation is balanced, and dispute
resolution is credible. Deeper InvIT and REIT platforms,
a more liquid corporate bond market for infrastructure
SPVs, and stable participation rules create the exit
infrastructure that supports larger entry allocations.

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