Construction One of the Sectors Attracting Maximum FDI
The Government of India introduced the Make in India initiative in 2014 to encourage companies to manufacture in India and incentivise dedicated investments into manufacturing.
The approach of the policy was to create a conducive environment for investments, develop a modern and efficient infrastructure, and open up new sectors for foreign capital.
FDI inflow from April 2014 to March 2020 ($357.35 billion) is 52.5% of the overall FDI received in the country since April 2000 ($680.91 billion). For the first time, India has crossed the $70-billion mark in FY 2019-20 and recorded total FDI inflow of $73.45 billion.
Of the 25 targeted sectors, 4 sectors of the economy have been attracting maximum FDI due to ease of policies.
The Construction Development sector in India which includes townships, housing, built-up infrastructure and construction development projects has witnessed an exponential growth of about 190% in terms of FDI equity inflow in FY 2019-20. The sector received FDI equity inflow of $213 billion in FY 2018-19 which almost tripled to $617 billion in FY 2019-2020. The sector holds a share of 5% in the total FDI inflow received in the country during April 2000 – March 2020.
The Service sector in India that includes Financial, Banking, Insurance, Non-Financial/ Business, Outsourcing, Research and Development (R&D), Courier, Tech, Testing and Analysis services has the highest contribution of 17% amongst other sectors in terms of total FDI inflow received in the country during April 2000 – March 2020. It also witnessed the highest FDI equity inflow of $7.86 billion in FY 2019-20.
The Automobile sector in India witnessed a growth of 35.12% in FDI during the last two fiscals (FY 2017-18 to FY 2019-20). FDI equity inflow increased to $2.82 billion during FY 2019-20. The FDI equity inflow received by the sector in FY 2019-20 is 12% of the total equity inflow received by the sector since April 2000 ($24.21 billion). The Telecommunications sector in India saw substantial growth of 67% in FY 2019-20 in terms of FDI equity inflow, which increased from $2.66 billion in FY 2018-19 to $4.44 billion in FY 2019-20. The sector holds a share of 8% in the total FDI inflow received in the country during April 2000 – March 2020.