Foreign Direct Investment In India Cross Rs 6.3 Lakh Crore Mark; FDI Inflow Sets New Record!

India’s inflow of foreign direct investment (FDI) hit an all-time high of over Rs 6 lakh crore in fiscal year 2021-22.

Among top host economies

Not to mention that per the UNCTAD World Investment Report (WIR) India has stepped up to seventh rank among the top 20 host economies for 2021.

The Ministry of Commerce and Industry said that the achievement was all thanks to the government’s FDI policy reforms.

Government’s role

The government has formed a “liberal and transparent policy for attracting FDI”, wherein non-critical sectors except certain strategically important sectors, are open for 100 percent FDI under the automatic route.

Automatic route here means that prior government approval or MHA’s security clearance won’t be required.

However, it is required for investments in sensitive sectors such as defence, media, telecommunication, satellites, private security agencies, civil aviation and mining, besides any investment from Pakistan and Bangladesh.

FDI inflow in FY21 stood at USD 81.97 billion.

Top countries

The most investments came from Singapore with 27 percent followed by the US (18 percent) and Mauritius (16 percent) during the last fiscal.

Mauritius is followed by the Netherlands (15.98 per cent), and Switzerland, capping the top five countries for FDI equity inflows into India in FY22.

Top sectors

Sectors which attracted the most foreign inflow are computer software and hardware at 24.60 per cent, followed by the services sector at 12.13 per cent and automobile industry at 11.89 per cent.

FDI equity inflow in manufacturing sectors has increased to Rs 1,58,332 crore in FY22 from Rs 89,766 crore in FY21, an increase of 76 percent.

This can be attributed to provisions of the FDI policy in which foreign investment in the manufacturing sector is under automatic route.

With this it has become one of the most preferred investment avenues for overseas investors.

Top states

Coming to states, Karnataka takes the top spot with a share of 37.55 per cent of the total FDI inflow in FY22.

It’s followed by neighboring state Maharashtra at 26.26 per cent and national capital Delhi at 13.93 per cent.