How many MoUs actually turn into factories and jobs?

On Wednesday, Trump announced on social media that a '$300 bn' deal has been struck by which America First Refining (AFR) will be opening the 'first new US oil refinery in 50 years in Brownsville, Texas' with investment from India's 'largest privately held energy company, Reliance'. Till Thursday, Reliance made no statement on its part about the 'deal'.

In a subsequent FT report, AFR placed the cost of the project at '$4 bn'. So, what's the extra $296 bn that Trump hollered about? AFR explained: the $300 bn figure was based on the calculation that the refinery would purchase and process 1.2 bn barrels of shale oil at an estimated value of $125 bn, and produce 50 bn gallons of refined product at around $175 bn. And so - voila! - a '$300 bn deal'.

Also Read: Reliance to invest in first new US oil refinery in 50 years, says Trump; calls $300 billion Texas project ‘historic deal’

Trump, of course, is hardly alone in turning 'plans' and 'commitments' to 'done deals'. This is a man who has intermittently declared that a war is over when it's pretty clear that it's still raging. But every Indian state, from Gujarat and UP to Kerala and West Bengal, holds global investment summits regularly, boasting of billions of dollars in investment promises from global companies. Last month at the Delhi AI Impact Summit, the figure pledged was of over $200 bn.

In such a romanticised landscape lovingly painted by politicians, corporates and media alike, tech giants like Amazon, Microsoft and Google have flooded eye-popping pledges to pour tens of billions into India's digital economy and infrastructure. This week, the Trump government just returned the gesture.

You'd think this ticker of global promises would make India the envy of any prospective investor. But step back from the hype, and a sobering truth emerges: the yawning gap between flashy declarations and actual implementation.

On paper, these numbers are staggering:

Amazon pledged over $35 bn in India to expand logistics, AI and exports by 2030.

Microsoft committed $17.5 bn to cloud and AI infrastructure in India.

Google said it'll invest about $15 bn to create a major AI hub.

Add to this a barrage of MNC interest in data centres, semiconductors and supply chain investments. Investment summit brochures now read like glossy annual reports.

Yes, FDI inflows surged to over $80 bn in 2024-25. This paints a fantastic picture of capital inflow, high global confidence, and MNC trust in the India growth story. But who funded the projects? Did they ultimately arrive? Actual investments on the ground tell a very different story.

Across India, actual data-crunching suggests that MoUs historically convert into real investments only in a minority of cases. Many agreements remain just on paper, because they're non-binding letters of intent, not legally enforceable commitments.

Even when states claim high conversion rates, evidence is patchy, and details buried in government press notes rather than audited public data. Some local officials boast of '77% conversion'. But nowhere is there a central, transparent audit confirming these claims. Investment pledges are usually spread out over a decade or more. That's convenient for headlines today, but harder to verify tomorrow.

MoUs strikingly abound in global investor meets. They are the preferred instrument at high-profile events for governments to boast huge headline figures, corporates to signal intent without committing capital immediately, and ambiguous timelines that stretch over years.

Also Read: Mukesh Ambani's Reliance capitalises on shifting energy alliances with US refinery pledge

But MoUs aren't guarantees. They don't require funds to be infused on schedule, or measurable job creation. They are promises on paper. What's striking is the absence of a central audit or public scoreboard, which systematically tracks how many of these billions pledged have actually materialised into capex, jobs created, factories built or products made.

So, where does the money really go? Despite the noise, FDI inflow figures do show real cash. But it doesn't always align with headline pledges: the $80 bn in FDI inflows in 2024-25 ticks up year over year. But FDI isn't synonymous with deployed capital. It includes flows already captured by ongoing operations, reinvested earnings and non-binding equity pledges.

There's a crucial difference between announced future investment and money actually spent today. Many big promises are simply 'expected inflows over many years' - projections and planning figures, not delivered capital.

This is not to deny that India has become a far more attractive destination for global capital than ever before. Large tech and services commitments are real, and backed by operational plans. But overuse of vague pledges and long timelines turns foreign investment into a kind of PR exercise.

The investment story needs third-party verification of implementation:

Independent audits of why certain MoUs didn't progress.

Clear disclosure of actual capital commitments vs theoretical ones.

Public tracking of progress toward job creation and capacity expansion.

Until then, the spectacle of corporate commitments will continue to resemble political manifestos more than hard economics - vast in promise, opaque in delivery, and frustratingly hard to quantify.