Sajjid Chinoy Speaks On India's Current Account Defict | Economy | West Asia Conflict

Added: 2026-06-03

[00:00:00]So for me, I think the main challenge that India has going forward is to attract FDI and to attract capital flows. So the problem the pressure point has been because capital flows have slowed, we've been unable to finance even a small current account deficit.

[00:00:16]And now with the war and higher crude prices, the current account deficit's going to widen significantly this year and capital flows will not be enough to finance it. So that's where the pressure is, but I think the lesson from this is what we have to do is go back to the drawing board and see how do we attract more FDI flows? I'll say one more point.

[00:00:37]Some recent research we've done shows that FDI in India FDI is driven by push factors and pull factors. Push factors tend to be global. When global interest rates are zero, FDI goes to emerging markets. Pull factors tend to be country-specific, right? India saw strong pull factors between 2005 and 2010. At that time we had a large private investment cycle and that attracted a lot of FDI. But since 2010, over the last 15 years, FDI into India has been driven largely by push factors.

[00:01:13]When US interest rates go down, India gets FDI and the