Bhartruhari Mahtab, Chairman, Standing Committee on Finance (file photo)
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A Parliamentary panel on Thursday raised concerns about the flow of private investment and the flight of Foreign Direct Investment (FDI) from India.These issues were discussed during the meeting of the Standing Committee on Finance under the Chairmanship of Bhartruhari Mahtab. The meeting was called for a briefing by the Economic Affairs Secretary (Anuradha Thakur) and the Chief Economic Adviser (V Anantha Nageswaran) on ‘General Economic Situation in the Country’. Nageswaran made a detailed presentation on the current scenario.Talking to the media after the meeting, Mahtab said that despite the headwinds, India's economy is also evolving in a better way, with certain very good indicators. Household savings have increased in comparison to last year, and investment is also increasing. “The challenge is when government investment is increasing, capital investment is growing, private investment is not picking up in the same vein. That is a challenge we have to address,” he said.He said that while India has been able to attract FDI, there is also a flight of FDI from the country. According to him, the Chief Economic Advisor characterised it as “cyclic” in nature. “In three years when investment increases, foreign direct investment increases, but in another three years there is also a flight,” he said, quoting CEA.The gross inward FDI inflows rose to $94.5 billion in 2025-26, up from $80.6 billion a year ago. However, net FDI stood at $7.6 billion, though nearly 700 per cent higher than in 2024-25.“The greater challenge is that the US is attracting foreign direct investment in large numbers. Another challenge is that after 2022, the interest index of most of the countries is increasing. Japan had zero interest in their savings; now they are providing 2-3 per cent interest on certain bonds. So the flight of money is happening towards these developed countries, whereas earlier, the emerging economies were getting this investment.” Mahtab said, adding that these are certain challenges which India has to go through, but India has a very good market.A significant part of the discussion focused on China's policy environment and the opportunities for India to attract companies seeking to diversify their manufacturing bases away from China. Mahtab said: “That is a concern. And for that, certain policy changes are required. At the same time, those who are moving out of China- what type of support will we be providing them in our country to set up their industry? That is also something.” He also pointed to recent policy measures adopted by China and their potential implications for global industry and investment flows.Responding to a query on the rupee, he said, “Yes, that was one of the concern and RBI is taking steps to control. The committee is scheduled to meet again in the third week of June and prepare a report outlining key economic challenges and policy recommendations, he concluded.Published on June 4, 2026
