Despite being a crucial driver of economic growth, Foreign Direct Investment playing a significant role as a major non-debt financial source for the economic development of the nation. Foreign organizations invest in India to take benefit of low remuneration and investment benefits such as tax exemption, etc. For a nation where foreign investment is constructed, it also refers to obtaining technical knowledge and generating employment.
The Indian government favorable policy control and a strong business environment have assured that foreign capital will flow in the country. The government has taken many measures in recent years for instance easing FDI policy across the domains such as Defense, PSUs, Oil refinery, telecom, power exchange and stock exchange.
As per the Department of Industry and Internal Trade, FDI equity flow in India stood at US$ 500.12 billion from the middle of April 2000 to September 2020, specifying that the government’s effort to boost the ease of doing business and relaxing FDI policy has given results.
FDI equity flow in India was stood at US$ 30.0 billion in 2020-21. Data 2020-21, specifies that the computer hardware and software domain captivated the highest FDI equity inflow of US$ 17.55 billion followed by the service domain at US$ 2.25 billion, trading at US$ 949 million and chemicals at US$ 437 million. In 2020-21, India obtained maximum FDI inflow from Singapore (US$ 8.30 million), followed by the US (US$ 7.12 billion), Cayman Islands (US$ 2.10 billion), the UK (US$ 1.35 billion) the Netherlands (US$ 1.49 billion) and Mauritius (US$ 2.0 billion)
In 2020-21, Gujrat obtained a maximum FDI equity inflow of US$ 16.0 billion, Maharashtra at US$ 3.61 billion Karnataka at US$ 3.66 billion and Delhi 2.66 billion.
Some of the FDI declarations made recently:
- The total FDI inflow was $ 28.10 Billion in the second quarter of FY21 of which the equity flow was $ 23.44 billion. This improved FDI equity inflow to US$ 30 billion between April 2000 to September 2020 at a 15% raise year basis as compared to FY20.
- In November 2020, Rs 2,480 crore foreign direct investment in ATC Telecom Infra Pvt Ltd was accepted by the Union Government,
- In November 2020, Amazon Web Service declared to invest US$ 2.77 billion in Telangana to construct multiple data center which was the highest FDI in the state.
- The government collected over 120 foreign direct investment proposal worth Rs, 12,000 crores from China since April 2020. Between April 2000 and September 2020, India collected US$ 2.43 billion FDI from China.
- As per the data provided by the Reserve Bank of India, India’s Outward Foreign Direct Investment in equity, loan and guarantee issue stood at US$ 1.06 billion in November 2020, vs US$ 3.51 billion in October 2020.
India is anticipated to captivate foreign direct investment of US$ 120-160 billion in upcoming years. In the last 10 years, the nation witnessed a 6.8% growth in the GDP with FDI rising to GDP at 1.8%. In terms of captivation, India ranks 3 as 80% of the investors are planning to invest in India in the next 2-3 years.