India, May 18 -- Free Trade Agreements (FTAs), reduction in import tariffs and improvement in business environment would encourage higher net foreign capital inflows into India, which have moderated in recent years, ADB Chief Economist Albert Park has said.

During 2021-22, India attracted net Foreign Direct Investment (FDI) of USD 38.6 billion, which came down to USD 28 billion in FY23 and further fell to USD 10.2 billion in FY24. Net FDI - inflow minus outflow - came down significantly to single digit, to USD 1 billion in FY25 but improved to USD 3 billion during the April-December period of FY26. The government should continue reducing import tariffs to ensure foreign investments remain competitive, he said in an interview.

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