India's Economic Jugglery: How we fool ourselves.

 https://www.business-standard.com/opinion/columns/fiis-vs-diis-reversing-roles-in-india-s-equity-market-after-25-years-125081402018_1.html

https://www.business-standard.com/economy/news/net-fdi-falls-to-40-million-in-may-2025-on-higher-outflows-125072301466_1.html

Let’s stitch together three reports and an opinion piece from Business Standard all recent—and read the tea leaves.

In 1992, foreign institutional investors (FIIs) dipped their toes into Indian equity with a modest investment of ₹13 crore. Domestic players (DIIs) then sat fat with ₹45,000 crore. Fast forward to 2014: the equations flipped. FIIs had ballooned to ₹6.6 trillion, while DIIs were crawling at ₹42,000 crore. In 2025, they’ve switched again: FIIs at ₹10 trillion, DIIs overtaking them at ₹14 trillion. Janak Raj of the Centre for Social and Economic Progress hails this as resilience. But let’s not dress up this as a symbol of “Atmanirbhar Bharat”. Capital has no hews of colour.

Now to the horror story: net FDI in May 2025 nosedived by 98.2 per cent year-on-year—$40 million, compared to $2.2 billion a year earlier. This isn’t a stumble, it’s a free fall: FY25 closed with net FDI at $353 million, down 96.5 per cent, the lowest in independent India’s history. Even Finance Minister Nirmala Sitharaman confessed that corporate India Inc is sitting on piles of cash, but refuses to invest in expansion. 

If you accuse me of cherry-picking gloomy headlines or just the bitter pills, let me raise you a few other new items in circulation. A rising number of wealthy Indians (HNI Families) are dropping citizenship, faster than bhakts can say Bharat Mata ki Jai. At the other end of the spectrum, job-hungry Indians are queueing up to work in war-torn Israel. When both billionaires and breadwinners are rushing for the exit, common-sense tells you something’s broken.

And this in the era of slogans—sorry, jumlas, to use Amit Shah’s own vocabulary—like Make in India and Atmanirbhar Bharat. Make in India was supposed to be the FDI magnet, yet manufacturing’s share of GDP has fallen from 16.3 per cent in 2014–15 to 14.1 per cent in 2023–24. Atmanirbhar Bharat, born in the pandemic with the logo of a roaring lion, was meant to build self-reliance. Instead, it became a euphemism for protectionist subsidies: PLI (Performance Linked Incentives) here, ELI (Economic Linked Incentives) there, a state-sponsored buffet for chosen firms.

Take Koo—the desi Twitter knock-off hand-picked by Modi’s Atmanirbhar App Challenge. It bagged awards, ministerial selfies, and a free marketing budget courtesy of the taxpayer. And today? It rests in the graveyard of state-sponsored duds, alongside other “success stories” conjured for optics. Then there’s Adani Ports’ bond issue: ₹5,000 crore underwritten entirely by State Run LIC. Not free markets, not innovation—just crony capitalism dressed up in saffron, with public money carrying billionaires (Adani & Ambani) on its back. Which brings us to the larger question: where is the Atmanirbhar App Challenge now? To any thinking citizen, it was less about digital self-reliance and more about manufacturing props for photo-ops. Its resemblance to the Philip Kotler Award—another gimmick rolled out to burnish Modi’s halo during the pandemic—is not coincidence. It’s a pattern.

Janak Raj calls DII dominance “heartening”. Raghuram Rajan said capital flows where it feels safe. Arvind Subramanian reminded us that predictability is more important than propaganda. But predictability is the last thing on offer. Domestic savings can prop up equity indices, but they cannot replace the technology, governance standards, and global networks that FDI brings.

And perception is being hammered on another front: Raid Raj. The BBC episode is the textbook case. A critical documentary airs; the Income-Tax department responds with “surveys” of BBC offices in Delhi and Mumbai. Phones seized, files carted away, newsrooms paralysed for days. Reporters Without Borders called it intimidation; journalists called it reprisal. The BBC quietly scaled down, folding into a collective newsroom with Indian ownership and tighter legal self-policing. And India lost a chance to become their South Asia hub for another decade. If one of the world’s most respected Broadcaster isn’t safe, who is?

The alarms are no longer blinking; they’re blazing red. FDI collapse, FIIs retreat, private capital on strike, public money underwriting private risks, wealthy citizens fleeing, workers migrating to conflict zones, media muzzled by Raid Raj. The optics of a rising superpower cannot paper over the reality of a retreating fortress.

The truth is ugly but simple. The optics of growth—GDP numbers polished like silver in a Gujarati wedding—cannot hide the smell of rot underneath. Investors aren’t fooled by LED-lit inaugurations or glossy roadshows. They want stability, fairness, and rule of law. What they see instead is a fortress of unpredictability, raids as statecraft, and policies that serve a handful of corporate favourites.

India is no longer an open, confident nation drawing the world to its doorstep. It is a fortress in retreat, a superpower only in WhatsApp forwards.