FDI Equity Inflows Into India cross $500 Billion
Foreign direct investment (FDI) equity inflows into India crossed the $500 billion milestone during April 2000 to September 2020 period, firmly establishing the country’s credentials as a safe and key investment destination in the world.
According to the data of the Department for Promotion of Industry and Internal Trade (DPIIT), the inflows during the period stood at $500.12 billion. About 29 % of the FDI came through the Mauritius route. It was followed by Singapore (21%), the US, the Netherlands, Japan (each 7%), and the UK (6%%).
India received $144.71 billion from Mauritius and about $106 billion from Singapore during the period under review. Other big investors have been from Germany, Cyprus, France and Cayman Islands. Since 2015-16, FDI inflows have been recording significant growth. In that fiscal, the country received USD 40 billion FDI, an increase of 35 per cent over the previous year. In 2016-17, 2017-18, 2018-19 and 2019-20, the investments stood at USD 43.5 billion, USD 44.85 billion, USD 44.37 billion and USD 50 billion, respectively. Key sectors which attracted the maximum of these inflows include services segment, computer software and hardware, telecommunications, trading, construction development, automobile, chemicals, and pharmaceuticals.
This growth is a strong reflection of the market potential of India coupled with the steady state of market reforms that India has undertaken since 2000, including opening up of various sectors of the economy to 100 per cent FDI over the last 5 years, he said. While the overall market potential of India will always be high, given the large population, many other factors like ease of doing business, land, labour laws, tax rates, availability of talent, logistics, and political stability also play important role in attracting FDI to any country. India has improved significantly across many of these areas over the last decade, and especially over the last 5 years, there is still a long way to go for it to be able to compete with countries like China and other markets like Vietnam, Thailand, and Malaysia.