India records 60% jump in FDI equity inflows in April

In yet another sign of the trust foreign investors have in India’s economy, the country recorded a 60% jump in the FDI equity inflows in the month of April this year when the country was battling with a ferocious second Covid wave that had stunned the country and the world, writes ETV Bharat's Deputy Editor Krishnanand Tripathi.

New Delhi: In yet another sign of the trust foreign investors have in India’s economy, the country recorded a 60% jump in the FDI equity inflows in the month of April this year when the country was battling with a ferocious second Covid wave that had stunned the country and the world.

According to the latest data released by the ministry of commerce and industries on Wednesday, India received a total of $6.24 billion FDI inflows in the month of April, an increase of 38% over the FDI inflows during the same month last year.

However, in the case of FDI equity inflows, India received $4.44 billion in April this year, which is a jump of 60% over the FDI equity inflows received during the same period last year. A surge in FDI equity inflows is crucial as it does not include re-investment figures.

“FDI inflows are an endorsement of India’s status as a preferred investment destination amongst global investors,” said the commerce ministry.

According to the World Investment Report which was released by the United Nation’s trade body UNCTAD on Monday, India was the fifth-largest recipient of foreign direct investment in the world after the USA, China, Hong Kong SAR and Singapore as the country received $64 billion in foreign direct investment in 2020.

India fifth largest recipient of FDI in 2020

India registered a 26.7% growth in FDI inflows last year at a time when the global FDI declined by 35% from $1.5 trillion to nearly $1 trillion. Also, India is the only country in South Asia that registered an increase in the FDI inflows as other countries such as Pakistan, Bangladesh and Sri Lanka registered a decline in their FDI inflows last year.

“Measures taken by the Government on the fronts of Foreign Direct Investment (FDI) policy reforms, investment facilitation and ease of doing business have resulted in increased FDI inflows into the country,” said the commerce ministry.

The following trends in India’s Foreign Direct Investment are an endorsement of its status as a preferred investment destination amongst global investors, the ministry added.

In April 2021, India attracted $6.24 billion FDI as against $4.53 billion in April 2020, an increase of 38%.

Similarly, India’s FDI equity inflows, which does not include reinvestments, jumped from $2.77 billion in April 2020 to $4.44 billion in April this year.

Mauritius, Singapore & Japan top investors

According to the latest official data, Mauritius was the top investing country with 24% of the FDI equity inflows, followed by Singapore (21%) and Japan (11%).

The Computer Software & Hardware sector was the biggest recipient of foreign funds with around 24% share of the total FDI equity inflows followed by the Services Sector (23%) and Education Sector (8%).

The data showed Karnataka was the top recipient state in April this year as it garnered nearly one-third of total FDI equity inflows with 31% share, followed by Maharashtra (19%) and Delhi (15%).