With a steady rise in capital inflows, particularly in the second half of 2000s, the overall foreign exchange reserve position provided comfort to progressive relaxation of the capital controls and simplification of the procedures for outbound investments from India. Three distinct overlapping phases as under can be discerned in the evolution of the Indian outward FDI policies.
For this reason, potential growth rises over the forecast period, reaching 1% in 2025. But the narrative for this year is that the economy does not have the supply-side capacity to produce more than it did last year.