Determinants of United States foreign investment in India

Abstract

The United States and India partnership is built on a shared commitment to freedom, democratic principles, equal treatment of all citizens, human rights, and the rule of law. The two nations have shared interests in promoting global security, stability, and economic prosperity through trade, investment, and connectivity. India and the United States cooperate closely at multilateral organizations, including the United Nations, G-20, Association of Southeast Asian Nations (ASEAN) Regional Forum, International Monetary Fund, World Bank, and World Trade Organization. The United States supports India joining the UN Security Council in 2021 for a two-year term and encourages a reformed UN Security Council that includes India as a permanent member. In this regard, the United States supports India’s emergence as a leading power especially in Asia where the authoritarian government of China has sought not only economic power but also strategic hegemony. The purpose of this paper is to (i) assess the importance of foreign direct investment in India’s current economic development strategy; (ii) analyze trends of United States foreign direct investment in India’s major economic sectors; and (iii) discuss the reform and policy recommendations to boost United States investments in India.