India’s Chief Economic Advisor, V Anantha Nageswaran, emphasized the need for a modern and adaptable regulatory framework to foster a business-friendly environment and attract investments. Speaking at the Post-Budget Webinar 2025 on "Making India Investment Friendly," he highlighted that while India has become a preferred destination for foreign direct investment (FDI), global economic challenges could impact inflows.

To counter this, India must focus on regulatory clarity, easing business operations, and ensuring that policies align with long-term economic goals. Nageswaran acknowledged that recent government actions worldwide might put economic growth under pressure, but India must take proactive steps to sustain investor confidence and economic momentum.

He underscored that maintaining a strong investment climate is crucial for capital formation, job creation, and overall growth, especially at a time when global investors are becoming more risk-averse. A well-structured and responsive regulatory system, he said, is essential to achieving this.

On the decision to increase the FDI cap in the insurance sector from 74% to 100%, Nageswaran noted that this move would bring in more capital, foster competition, and drive innovation. However, he also stressed the need for additional policy safeguards to ensure these benefits are maximized for both consumers and the broader economy.

Discussing India's bilateral investment treaty (BIT) framework, he stated that a new model text is being designed to strike a balance between investor protection and India’s sovereign regulatory rights. Given the evolving global investment landscape, international investors now seek stronger security for their capital, especially in emerging markets. The revised BIT framework will align with international standards while ensuring that India's public policy decisions remain uncompromised by external legal constraints.

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