FDI inflows into India for the period April 2000 to September 2024 have crossed the one trillion USD milestone.
FDI is important for India as it will require huge investments to spur growth in the infrastructure sector in the coming years (representative image).
Foreign direct investment (FDI) inflows into India have crossed the one trillion US dollar milestone in the period April 2000 to September 2024, establishing India as a safe and key investment destination globally. The reputation of the country has been firmly established.
According to data from the Department for Promotion of Industry and Internal Trade (DPIIT), the total amount of FDI during the said period, including equity, reinvested earnings and other capital, stood at USD 1,033.40 billion.
About 25 percent of FDI came through Mauritius. It is followed by Singapore (24 percent), United States (10 percent), Netherlands (7 percent), Japan (6 percent), United Kingdom (5 percent), United Arab Emirates (3 percent) and Cayman. Islands, Germany and Cyprus share 2 percent.
According to the data, India received USD 177.18 billion from Mauritius, USD 167.47 billion from Singapore and USD 67.8 billion during the period under review.
Key sectors attracting maximum inflows include the services sector, computer software and hardware, telecommunications, trade, construction development, automobiles, chemicals and pharmaceuticals.
According to the Ministry of Commerce and Industry, since 2014, India has attracted gross FDI inflows of USD 667.4 billion (2014-24), registering a growth of 119 percent over the previous decade (2004-14). has gone
“This investment flow spans 31 states and 57 sectors, leading to growth in diverse industries. Most sectors, except strategically important sectors, are open to 100 per cent FDI under the automatic route.
FDI equity inflows into the manufacturing sector during the last decade (2014-24) reached US$ 165.1 billion, a 69% increase over the previous decade (2004-14), which saw an inflow of US$ 97.7 billion. Hoi, an official said.
To ensure that India remains an attractive and investor-friendly destination, the government reviews the FDI policy on a continuous basis and makes changes from time to time after extensive consultation with stakeholders.
Foreign inflows to India are likely to pick up in 2025, experts say, as healthy macroeconomic numbers, improved industrial production and attractive PLI schemes will attract more foreign players amid geopolitical headwinds. .
He added that despite the global challenges, India is still a preferred investment destination.
Avimukt Dar, founding partner of INDUSLAW, said inflows are likely to continue strong. Private equity financing in the tech sector, which had slowed down in the past, is strongly expected to pick up again as various funds have had good exits in the public markets and are ready to redeploy.
“The government can continue with structural reforms by urging SEBI, especially in the M&A arena, to make the public takeover system more friendly to foreign players,” Dar said.
Rumki Majumdar, economist at consultancy Deloitte India, said FDI inflows are likely to remain modest amid expected policy changes in the US and the impact of policy stimulus on China’s economy.
Geopolitical conditions could change supply chains, and trade regulations would dampen investor sentiment, keeping capital flows volatile, he said, adding that the government needed infrastructure with timely project execution. Capex will have to be prioritized, skills development of workforce through PPPs and incentives, investment in digital. Ecosystems for productivity gains, and foster R&D for enabling digital solutions. Inclusion and formalization of the economy.
Commenting on the data, Manav Nagaraj, partner, Shardul Amarchand Mangaldas & Company, said that FDI in India is likely to grow across all sectors – early-stage investments, growth capital and strategic investments.
“India as an investment destination has historically been and continues to be attractive to foreign investors from various countries, be it from the US, UK, continental Europe or Asian countries,” he added.
FDI is allowed through the automatic route in most sectors, while foreign investors in sectors such as telecom, media, pharmaceuticals and insurance require government approval.
Under the government approval route, a foreign investor has to obtain prior approval from the concerned ministry or department, while, under the automatic route, the foreign investor can only get approval from the Reserve Bank of India (RBI) after investment. need to be notified. .
Currently, FDI is prohibited in certain sectors. They are lotteries, gambling and betting, chit funds, investment companies, real estate business, and manufacture of cigars, cheroots, cigarillos and cigarettes using tobacco.
FDI is important for India as it will need huge investments to boost growth in the infrastructure sector in the coming years. A healthy foreign exchange also helps maintain the balance of payments and the value of the rupee.
(This story has not been edited by News18 staff and is published from a syndicated news agency feed. PTI)