New Delhi: India received a record $83.57 billion in foreign direct investment in the last financial year that ended in March as the official data showed the FDI inflows rose by over 23% post Covid. The data also showed that the country’s bid to attract foreign companies to manufacture in India is paying off as the manufacturing sector registered a sharp increase of 76% on a year-on-year basis in the FY 2021-22 (April-March period).
The country had received a record $82 billion in foreign direct investment in 2020-21 despite a lethal delta variant of the highly contagious SarS-CoV-2 virus hitting the country and the world. India registered an increase of $1.6 billion last year in comparison with the FDI receipts in 2020-21 despite the Russia-Ukraine war that started in February this year that badly affected the investor’s sentiment. The data also showed that the FDI inflows have increased by 20 times in the last 20 years. The country had received $4.3 billion FDI in 2003-04 and $45.15 billion in 2014-15.
India is fast emerging as a preferred destination for foreign investments in the manufacturing sector as more and more companies are relocating their supply chains out of China. The FDI equity inflows in the manufacturing sector increased by 76% from $12.09 billion in 2020-21 to $21.34 billion in the last fiscal. “The following trends in India’s Foreign Direct Investment inflow are an endorsement of its status as a preferred investment destination amongst global investors,” said the government. On a two yearly basis, the FDI inflows went up by 23% during the last two financial years as the country received $171.84 billion between March 2020 to March 2022, in comparison with the FDI receipts between February 2018 to February 2020 when it has been estimated at over $141 billion.
How money is routed to India?
In terms of top investor countries, Singapore is at the top accounting for 27% FDI investment. It is followed by the U.S.A (18%) and Mauritius (16%). The Computer Software and Hardware sector has emerged as the top recipient of FDI Equity inflow during FY 2021-22 with around 25% share followed by Services Sector (12%) and Automobile Industry (12%).
Karnataka, Delhi, Maharashtra top destinations
Karnataka bagged 53% FDI in the Computer Software & Hardware sector, followed by Delhi (17%) and Maharashtra (17%). Karnataka, which is home to India’s IT capital Bengaluru, is also the top recipient with 38% share in the total FDI Equity inflows reported during the FY 2021-22. Karnataka is followed by Maharashtra (26%) and Delhi (14%). Majority of the equity inflow of Karnataka has been reported in the Computer Software & Hardware sector (35%), Automobile Industry (20%) and Education sector (12%).
In order to attract more foreign direct investment in the country, the government has further liberalized and simplified the FDI policy and most of the sectors are open for investment under the automatic route.
Also read: Govt amends FEMA rules to allow 20 pc FDI in LIC
PTI
