India must address challenges to unlock its FDI potential

With concerns about slowing economic growth and declining foreign direct investment (FDI) inflows, SANJAY NAYAR, former head of India for KKR & Co and Citigroup, and now the founder of venture capital fund Sorin Investments and president of Assocham, shares his strategy for putting India back on the path to long-term growth with Surajeet Das Gupta in New Delhi. Edited excerpts:

- SANJAY NAYAR

Given concerns about a slowdown in India's economic growth, what steps should the country take to ensure long-term progress?

The government has made headway in boosting consumer sentiment and improving access to essential goods and services. These efforts have laid the foundation for stronger economic resilience. At a time when India's economy stands at a critical juncture, policies that address consumption and FDI challenges can help chart a path towards long-term growth. Since consumption accounts for nearly 60 per cent of India's GDP, increasing household spending is essential for sustainable economic expansion. However, inflation, low disposable incomes, and restricted access to credit have hindered domestic consumption in recent years.

What steps do you suggest to increase consumption?