At the Bloomberg Economic Forum in India, Finance Minister Nirmala Sitharaman outlined efforts to draw greater investment into artificial intelligence, semiconductors, and clean energy — sectors where competition for global capital has grown as funds flow toward the United States and frontier AI development.
Sitharaman acknowledged profit repatriation and capital outflows by overseas investors, noting that addressing those flows lay beyond what any single government acting alone could bring about. She told the panel that the growing concentration of global investment in artificial intelligence — directed overwhelmingly toward the United States — was reshaping where capital flows, and that countries outside that orbit risked being left without a share of the opportunity.
Drawing in AI investment to lift both adoption rates and workforce productivity was a priority she outlined, even as the broader flow of global capital tilted toward frontier AI development and hyperscale infrastructure. Sitharaman pointed to infrastructure upgrades, streamlined regulatory frameworks, and a rapidly growing digital economy as factors drawing foreign investment to India.
Pointing to the breadth of domestic demand and the expanding purchasing power of consumers at home, she argued that businesses stand to benefit from producing both for the local market and for export. Attracting investment forms only one thread in a wider set of challenges that policymakers continue to work through, with attracting private investment and steering it toward productive sectors among the issues the country's policymakers are addressing.
Sitharaman noted that capital flows were gravitating toward the United States and artificial intelligence ventures, underlining the case for India to draw investment into its own technology development landscape. She pushed back on characterisations of the chip strategy as unworkable, noting that a deliberate policy choice had been made to target segments of the semiconductor market beyond the cutting-edge tier.
Attention in that conversation turned to chips powering everyday products — from refrigerators and cars to internet-connected home devices — as an area where the country was directing its efforts. Building capabilities across multiple layers of the semiconductor supply chain, rather than focusing solely on the most advanced nodes, appears to be the guiding logic behind the approach.
Among the sectors Sitharaman pointed to as having potential to draw investment were semiconductor manufacturing and design, chip testing and packaging, renewable energy, green hydrogen, green ammonia, and electric vehicles. Powering AI infrastructure at scale would draw heavily on electricity supplies, she noted, which places reliable access to clean energy at the centre of planning decisions as India builds out its data centre network.
Data centres have drawn investment under the government's watch, yet she noted that further capital remains necessary, with energy infrastructure and transmission capacity both playing a part in sustaining any broader expansion. When questions arose about the rupee losing ground and what that might mean for investors, Sitharaman indicated that the Reserve Bank of India's priority was managing currency swings rather than anchoring the exchange rate at any fixed level, adding that the central bank had no intention of pegging the rupee's value.
She described the central bank's actions as an attempt to bring the currency's swings under control. On the matter of currency policy, Sitharaman conveyed that existing central bank interventions would be maintained, while also putting forward the position that the rupee ought to be left to settle at a market-determined rate.
Currency depreciation and capital outflows were among the pressures she pointed to as potential influences on investor behaviour, even where broader conditions in India continued to support inflows. Pressure on the rupee was traced by Sitharaman largely to forces originating outside the country, with the finance minister adding that sound macroeconomic fundamentals would continue to be upheld by the government.
Budgetary restraint ranked among her stated priorities, with the administration's position being that spending on welfare, education, and healthcare had not been cut to achieve it. When investors put forward proposals on capital gains tax changes and broader tax simplification, Sitharaman gave no indication of whether those ideas would feature in deliberations ahead of the next Union Budget.
Budget work was under way, she noted, adding that weighing in on possible decisions at that point would not be appropriate. Long-term capital gains tax and securities transaction tax were both areas she pointed to as continuing topics of debate among investors based in India and elsewhere. Her remarks touched on the ongoing debate over securities transaction tax and how different asset classes are taxed, with Sitharaman noting that an earlier effort by the government had aimed at bringing those rates into closer alignment across categories.
The National Infrastructure Pipeline, set up in 2019, has expanded its project portfolio from roughly $2 trillion at inception to upwards of $4.5 trillion, she noted. Hosted as an open-access resource, the portal draws together infrastructure ventures spanning multiple states and sectors, letting investors filter and explore options according to their particular fields of focus.
Two bodies named in her remarks — the National Bank for Financing Infrastructure and Development alongside the National Investment and Infrastructure Fund — were described as playing a part in drawing long-term capital toward infrastructure work. Private-sector investment in India has been picking up momentum, Sitharaman noted, following a prolonged stretch during which heavy corporate borrowing and troubled bank assets had kept fresh capital spending in check.
Pointing to the work done on non-performing loans and the restoration of healthier corporate finances, she noted that a number of businesses had built up cash holdings substantial enough to fund new capacity. A reduced corporate tax rate for companies took effect in 2019 under a framework the government put in place to draw in investment, she noted.
Among the industries drawing investment interest, Sitharaman pointed to renewable energy, semiconductor design and manufacturing, biosimilars, pharmaceuticals, and facilities dedicated to aircraft maintenance, repair, and overhaul work. Aircraft orders placed by Indian carriers were among the examples she drew on when framing the growth of civil aviation as a fresh opening for investment.
