FDI can triple in next 2 years if India plays its cards right; AI revolution made for the country, says Ernie Bower

Indian companies themselves will need to adopt a more outward-looking strategy for future growth

• India could triple foreign direct investment in two years
• Opening more sectors and improving climate key for investment
• AI revolution offers opportunities if challenges are tackled

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India could see a sharp surge in foreign direct investment over the next two years if it accelerates economic opening and improves the investment climate in key sectors, according to Ernie Bower, president and CEO of Bower Group Asia.

“If India plays its cards right, foreign direct investment into the country can triple in the next two years,” Bower told Moneycontrol in an interview, adding the country stands at a pivotal moment as companies rethink supply chains and investment strategies amid geopolitical tensions.

Bower said that attracting large-scale investment will require India to open more sectors to global capital while encouraging domestic companies to expand their footprint overseas. “You have to open up on investment, and Indian companies also have to play a bigger role in the world. Once India embraces this opening up, Indian investment in Asia and Africa will be a game changer,” he said.

He argued that India is well-positioned to benefit from the next wave of global technological investment, particularly as artificial intelligence begins reshaping global industries. The scale of investment required for AI infrastructure could trigger flows similar to those that once transformed China into a global manufacturing hub for companies such as Apple.

“India was made for the AI revolution,” Bower said, pointing to the country’s large pool of engineers and technology professionals. However, he added that India would need to address challenges related to computing power, energy availability and regulatory clarity to fully capitalise on the opportunity.

Beyond technology, Bower said the global economy is moving toward a more fragmented and multipolar order, creating new opportunities for countries that can balance geopolitical relationships. In that environment, India could emerge as a central player.

At the same time, he cautioned that incentives alone will not be sufficient to attract investors. Schemes such as the Production Linked Incentive (PLI) programme have helped draw attention to India’s manufacturing potential, but investors ultimately look for a broader ecosystem.

“Incentives can make companies take a look, but they are not enough on their own,” he said. “The key factors remain infrastructure, governance, regulatory clarity and an investment-friendly culture.”

Bower added that Indian companies themselves will need to adopt a more outward-looking strategy. With a large domestic market, many firms have historically focused on growth at home. However, as global supply chains shift, expanding abroad could help Indian companies leverage the country’s growing geopolitical goodwill.