What is also needed is political support consistent with such policies. In other words, the FDI does not flow merely from desirable economic policies, it also requires desirable political actions. The party in power must be committed to accept all the whims and eccentricities of the foreign investor. Of course, it is not lost on these journalists that such policies are beneficial to them as well in the form of better perks. One, as the government opened the country to attract FDI, it also had to promote consumerism considered as a necessary condition.
Consumerism impacts domestic savings negatively.
Other countries, such as Mexico, have also experienced similar decline. In the process, FDI has lost much of its advantage as it became a substitute instead of supplement to savings. Since the flow of FDI is small, the country has suffered a net loss in the saving front thereby reducing its potential for income growth. Two, even though FDI is supposed to introduce new technologies, the experience anywhere, and in India so far, does not support this premise. There is no empirical evidence about any major advance in the technological base in Indian industry.