FDI Equity Inflows Slips to $58.77 Billion in FY22

The Foreign Direct Investment (FDI) flows coming into the Indian equity market declined slightly by a small margin of just 1%, according to the data reported by the Department for Promotion of Industry and Internal Trade (DPIIT).

The foreign direct investment equity inflow to India in the financial year 2019-20 was $59.63 billion.

Foreign direct investment in India is rising. In fact, it has increased so much this past year that it has reached its highest-ever level of investment at $83.57 billion USD in FY22. In comparison, total foreign direct investment was $81.97 billion USD in FY21.

According to data from the Ministry of Commerce & Industry, India is now becoming a desirable location for foreign manufacturing companies. According to this source, Foreign direct investment (FDI) equity inflow into the sector has increased by 76% in FY22 compared to FY21 (from 12.09 billion to 21.34).

In terms of top investor countries for FDI Equity inflow - Singapore is at the apex with 27%, followed by the USA (18%) and Mauritius (16%).

In terms of sector-wise, Computer Software & Hardware has emerged as the top recipient sector of foreign direct investment equity inflow during 2016-17 and registered a growth of around 27.5 percent in FDI equity inflow over the previous year. The major sectors for FDI are computer software and hardware (23.4% share), services (13%), and the automobile industry (11%).

According to research done by the government of India, the top 3 states to receive foreign direct investment in Computer Software & Hardware sectors from April 2016 - to March 2017 are Karnataka (53%), Delhi (17%), and Maharashtra (17%).

Karnataka has experienced a 38% share of total FDI equity inflow into the state during a given fiscal year. Maharashtra, on the other hand, sits in second place with 26%. The majority of this FDI goes to IT (35%) and automotive (20%) investments.

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