India Received 1740 Crore/Day FDI In Last 12 Months, Highest Ever! Karnataka Beats Tamil Nadu To Becomes #1 FDI Destination

The Ministry of Commerce and Industry has reported that India received the highest foreign direct investment (FDI inflow) to the tune of $83.57 billion for the financial year 2021-2022.

A 20-Fold Jump From Single Digit Billions

The country’s foreign investment inflows increased 20-fold since the financial year 2003-04 when it recorded just $4.3 billion.

The figures for 2021-22 have exceeded that of the previous financial year by $1.60 billion despite hurdles such as the Russian invasion of Ukraine and the pandemic. 

Manufacturing Sector

FDI inflow in the manufacturing sector rose by 76 per cent in the previous financial year ($21.34 billion) as compared to the $12.09 billion in the financial year 2020-21.

This goes to show that India is quickly becoming the preferred country for foreign investments especially in the manufacturing sector.

Post-Pandemic Performance

FDI inflow has increased by 23 per cent post- pandemic to $171.84 billion against $141.10 billion between February 2018-2020.

Biggest Contributing Countries

Singapore was the top contributor to the inflow with a share of 27 per cent, followed by the US (18 per cent) and Mauritius accounting for 16 per cent.

Popular Sectors

In terms of sectors receiving the funding, computer software and hardware got the most with around 25 per cent share, followed by services sector and automobile sector getting 12 per cent each.

In the computer hardware and software sector, Karnataka (53 per cent), Delhi and Maharashtra (17 per cent each) bagged most of the inflow.

Karnataka

Karnataka was also the biggest recipient of foreign investment overall, with 38% share of the total FDI Equity inflow followed by Maharashtra (26%) and Delhi (14%).

Karnataka also received most of the inflow in the Computer Software & Hardware’ (35%), Automobile Industry (20%) and `Education’ (12%) sectors during the FY 2021-22.

Result Of Policy Reforms

The record levels of FDI inflow is the result of measures taken in the past eight years.

The government constantly reviews the FDI policy and keeps making significant changes to ensure that India remains attractive business-wise and an investor friendly destination.

Sector-Specific Reforms

The government has formulated a liberal and transparent FDI policy under which most sectors are open to FDI under the automatic route.

In order to further liberalise and simplify the policy to ensure ease of doing business and attract investments, reforms have been undertaken recently across sectors like: 

• Coal mining
• Contract manufacturing
• Digital media
• Single-brand retail trading
• Civil aviation
• Defence
• Insurance 
• Telecom