Topic: Changes in industrial policy and their effects on industrial growth.
Q5. Analyse policy approaches that can position India as a preferred destination for foreign investment. Suggest safeguards to ensure these approaches also promote and protect domestic innovation capacity. (10 M)
Difficulty Level: Medium
Reference: NIE
Why the question
Growing global investor interest in India, combined with concerns over protecting indigenous technological capacity, has made balancing FDI attraction with domestic innovation a critical policy priority.Key Demand of the question
The question asks to outline policy approaches that make India a preferred FDI destination and also to suggest mechanisms that ensure such policies safeguard and strengthen domestic innovation capacity.Structure of the Answer:
Introduction
Talk about India’s industrial policy objectives with both FDI inflows and technological self-reliance.
Body
- Policy approaches to attract foreign investment – suggest key broad measures such as regulatory stability, infrastructure improvement, fiscal incentives, and sectoral focus.
- Safeguards to protect and promote domestic innovation – outline methods like technology transfer mandates, IPR strengthening, domestic value addition norms, and innovation funding.
Conclusion
Provide a forward-looking statement on integrating openness with self-reliance to sustain long-term competitiveness.
