Singapore, Mauritius Beats US, China, UK To Become Largest FDI Source For India In 2023


Rohit Kulkarni

Rohit Kulkarni

Jun 13, 2024


As per recent data from government records, there has been a decline in the foreign direct investment (FDI) inflows during 2023-24.

Singapore, Mauritius Beats US, China, UK To Become Largest FDI Source For India In 2023

Singapore’s Dominance in India’s FDI Landscape

Notably, the highest contribution came from Singapore despite an overall contraction in overseas capital due to global economic uncertainties.

Though there is reduction in FDI from Singapore also, which decreased by 31.55% to $11.77 billion in the fiscal year, it still remained top investor in India.

Speaking of reduction and expansion, then the FDI from Mauritius, the U.S., the U.K. has decreased whereas from Netherlands and Japan, has increased.

Since 2018-19, there has been a consistent FDI for India from Singapore, part of which can be attributed to the amendments in the India-Mauritius tax treaties which favoured favored Singapore as an investment hub.

As per an Economist at Deloitte India, Rumki Majumdar, what took Singapore to top spot for FDI in India is its status as a global financial centre and also its alignment with India’s regulatory changes, such as amendments to REIT Regulations, which attracted investors.

Sanjiv Malhotra, a Senior Advisor at Shardul Amarchand Mangaldas & Co, emphasized Singapore’s favourable tax regime and regulatory efficiency as primary factors driving its position in India’s FDI landscape. Despite amendments in tax treaties, Singapore remains attractive for investment due to its robust operational setup for ventures in Southeast Asia.

On the other hand, Mauritius, which was previously favoured for its tax advantages, saw a decline in investment appeal after India introduced source-based taxation for capital gains in 2016. 

A Partner at INDUSLAW, Anindya Ghosh highlighted Singapore’s emergence as a preferred jurisdiction for multinational companies, given its regional headquarters and convenient investment channels into India.

Speaking of the future, then multiple factors like global economic conditions, geopolitical tensions, and domestic policy shall shape and influence the FDI trends in 2024-25. 

FDI Trends and Sectoral Variances in India

Totalling $44.42 billion, there has been a 3.49% decrease in the FDI equity inflows in 2023-24. Whereas on the other hand, total FDI including the reinvested earnings and other capital, marginally declined by one percent to $70.95 billion. 

In addition to the above trends, FDI also varied across sectors.

There has been FDI growth in construction, development, and power sectors whereas decline in FDI for services, software, and hardware.

FDI not only play a big role in India’s infrastructure development and balance of payments, it is also a vital tool for economic growth and currency stability, particularly against the U.S. dollar. 

Despite the ups and downs in the numbers, India remains to be an attractive investment destination for global investors, necessitating continual policy efforts to sustain and enhance investment inflows.


Rohit Kulkarni
Rohit Kulkarni
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