For years, India has measured its economic rise partly through its ability to attract foreign investment. That remains an important benchmark because foreign direct investment is more than a source of capital; it is a vote of confidence in a country’s long-term prospects. It brings technology, management expertise, integration into global supply chains and, above all, a commitment that extends beyond short-term financial returns. That is why the sharp decline in net FDI deserves closer attention than official explanations alone permit. The government argues that the fall in net inflows reflects two positive developments rather than a loss of confidence.

Foreign investors are repatriating higher profits because their investments have performed well, while Indian companies are investing more aggressively overseas under liberalised rules. Both explanations contain elements of truth. A maturing economy should naturally produce globally ambitious firms, and successful foreign investors are entitled to repatriate legitimate returns. Yet these facts do not settle the larger question. Capital rarely sends a single message. If India is becoming an increasingly compelling destination for long-term investment, fresh inflows should, over time, comfortably exceed........

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