India takes 7th place in global FDI investment

UNCTAD report on FDI flow

Photo credit Twitter UNCTAD

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By Our Special Correspondent

New Delhi, July 28: India has risen by one place to become the seventh top destination for the foreign direct investment (FDI), while Singapore remains the top source of the fund flow.

The FDI flow in the manufacturing space has also seen a steady rise, registering over 76 per cent rise in 2021-22 at USD 21.34 billion.

Singapore with 27.01 per cent and USA at 17.94 per cent are the top two sources of FDI flow for India.

Mauritius is at third with 15.98 per cent share in the FDI flow in the country, while Netherland (7.86 per cent) and Switzerland (7.31 per cent) are the next big sources of the FDI flow.

The UNCTAD World Investment Report (WIR) 2022, in its analysis of the global trends in FDI inflows, has noted that India has improved one position to the seventh rank  among the top 20 host economies for 2021.

The FDI equity inflow in the manufacturing sectors has also increased by 76 per cent in FY 2021-22 (USD 21.34 billion) compared to previous FY 2020-21 (USD 12.09 billion).

This is in line with India positioning for the key space in the global supply chain in the post-pandemic world order, as major economies look for alternative to China to source goods.

Despite the pandemic and afterwards, India received the highest annual FDI inflows of USD 84,835 million in FY 21-22, overtaking last year’s FDI by USD 2.87 billion.

Earlier, FDI inflows increased from USD 74.391 billion in FY 19-20 to USD 81.973 billion in FY 20-21.

“The Government continues to liberalize investment restrictions, eliminate regulatory barriers, nurture international relations and improve business environment. Changes are made in the FDI policy after having consultations with stakeholders, including apex industry chambers, associations, representatives of industries/groups and other organizations,” said the government in an official statement on Thursday.

While foreign investments are permitted under the automatic route in most sectors/activities, due to strategic reasons certain investments are either restricted or permitted under the Government approval route through a screening mechanism as per the prescribed framework.

Top five sectors receiving highest FDI Equity Inflow during FY 2021-22 are Computer Software & Hardware (24.60 per cent), Services Sector (Fin., Banking, Insurance, Non Fin/Business, Outsourcing, R&D, Courier, Tech. Testing and Analysis, Other) (12.13 per cent), Automobile Industry (11.89 per cent), Trading 7.72 per cent and Construction (Infrastructure) Activities (5.52 per cent).

Top 5 States receiving highest FDI Equity Inflow during FY 2021-22 are Karnataka (37.55 per cent), Maharashtra (26.26 per cent), Delhi (13.93 per cent) Tamil Nadu (5.10 per cent) and Haryana (4.76 per cent).

During FY 2021-22, FDI has been reported from 101 countries, whereas, it was reported from 97 countries during previous FY 2020-21.

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