FDI beats Covid blues, records 40% growth in first 9 months

The Ministry of Commerce and Industries said the efforts made by the government in the last six-and-a-half years have borne fruit as it has put in place an enabling mechanism and investor-friendly FDI policy, writes ETV Bharat Deputy News Editor Krishnanand Tripathi.

New Delhi: Despite the ongoing Covid-19 global pandemic, India story for foreign investors remained intact throughout the first 9 months of the current financial year as foreign direct investment (FDI) equity inflows in the country increased by 40% during April-December 2020, the latest official data released on Thursday showed.

According to the ministry of commerce, total FDI inflows in the country went up from $55.14 billion to $67.54 billion during the April-December period of the current fiscal, an increase of $12.4 billion or 22% increase over the FDI received during the same period last year.

However, there is an even bigger increase in the FDI equity inflows, which went up from $36.77 billion in the first 9 months of FY 2019-20 to $51.47 billion during the same period of the current financial year, an increase of 40%.

While the FDI inflows include all kinds of FDI investments into an economy from non-resident investors, including investment in debt instruments, the FDI equity inflows are crucial as it is a direct equity investment into companies of a country by foreign investors.

The government said Foreign Direct Investment (FDI) is a major driver of economic growth and an important source of non-debt finance for the economic development of India.

The ministry of commerce and industries said the efforts made by the government in the last six-and-a-half years have borne fruit as it has put in place an enabling mechanism and investor-friendly FDI policy.

“The intent all this while has been to make the FDI policy more investor-friendly and remove the policy bottlenecks that have been hindering the investment inflows into the country,” said the ministry of commerce and industries.

Talking about the encouraging data in recent times, the government said the FDI inflows recorded an increase of 37% during the third quarter, from $19.09 billion in the Q3 of the last financial year to $26.16 billion in the third quarter of the current fiscal.

The same trend of growth continued in the month of December as well when it recorded a 24% year-on-year growth. The FDI inflows went up from $7.46 billion in December 2019 to $9.22 billion in December 2020.

The ministry said the measures related to FDI policy reforms, investment facilitation and ease of doing business have resulted in increased FDI inflows into the country, which is evident from the increased FDI inflows in the country during the first three-quarters of the current fiscal.

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