Foreign capital has long served as a backbone for national development — fueling infrastructure, advancing technology, and plugging investment gaps that domestic savings alone cannot fill. From railways to renewable energy, it underwrites the ambitions that reshape economies. Yet, in India, this financial lifeline often finds itself caught in a cultural crossfire.
Highlighting this paradox, Akshat Shrivastava, Founder and CEO of Wisdom Hatch, pointed out that while countries worldwide welcome foreign capital to build national wealth, Indians uniquely stigmatise it.
In a post on X (formerly Twitter), Shrivastava wrote, “Every nation on earth got rich by bringing foreign wealth.
- UK when they looted India
- Spain and Portugal when they were ship traders
- US: when it exported US$ to the world
- Even China: it is a net exporter and brings foreign wealth.
It is only Indians, who consider foreign capital as impure. We need mass education.”
His post sparked a flurry of responses, with users echoing concerns over India’s reluctance to embrace global capital.
One user pointed out, “Every rich nation pulled in foreign capital first, then preached self-reliance later. Some numbers: UK: Extracted an estimated $45T from India (per Utsa Patnaik). China: Attracted $1T+ in FDI since 1990s. US: Net $19T foreign investment in Treasuries, equities, startups. Meanwhile in India:. Net FDI inflow in FY24? Just $10 billion. Net FPI equity flows in FY24? Negative. We romanticise swadeshi, while others weaponize capital flows. Foreign money builds roads, factories, semiconductors, not just stock prices.”
Another added, “Not sure it’s about purity, seems more like a mix of post-colonial trauma + misplaced self-reliance. We glorified ‘swadeshi’ so hard that ‘foreign capital’ became synonymous with selling out. But the irony is that most of our ‘homegrown unicorns’ are already backed by global VC money. We don’t need just mass education, we need mindset rewiring.”
A third voice warned of the practical risks: “People are getting carried away with SIP inflow charts on YouTube. Just because DIIs have majority stake than FIIs doesn’t mean we can afford to ‘kick out’ FIIs. That’s delusional. India’s market cap is $4 trillion. FIIs hold $700-800 billion in equities plus a big chunk in bonds. When they pulled out just $10 billion between October and January, the rupee slid. Now imagine if that exit was larger. You don’t get a correction — you get a collapse. We still import more than we export. To settle imports, we pay in dollars, not rupees. If foreign capital — via FII or FDI — doesn’t come in, you’re left selling rupees to buy dollars, and that means one thing: currency depreciation. Chasing them away with taxes or regulations is like blocking your own oxygen supply. Foreign capital isn’t optional — it’s the economic norm.”
