Rise in FDI Inflows Expected by the Government in the Coming Months

The government is expecting an increase in foreign direct investment inflows in the coming months, even after the occurrence of global headwinds, as stated by a senior official of the industry department on Thursday. The official also stated that the amount of pending FDI proposals is lowest from China currently. 

“Foreign Inflows have an effect because of the global slowdown that we are seeing for the last 18 months…. But we are hopeful, (as) India has shown very great numbers compared to the rest of the countries. So, we are hoping that we would be making up for all that”, said Manmeet K Nanda, joint secretary of the Department for Promotion of Industry and Internal Trade (DPIIT). 

The equity inflows of FDI fell nearly a quarter to $10.3 billion in the quarter to September 2022 from $13.6 billion a year before. In the first half of this financial year, the equity inflows of FDI shrank 14% from $31.5 billion the past year to $26.91 billion, while the total inflows were 8.8% lower from $42.86 billion a year ago to $39.09 billion in the April to September period.

According to Nanda, investments and equity inflows generally improve towards the last quarter of the financial year. Under the Press Note 3 of 2020, on the number of pending proposals from China, she said, “pendency is probably the lowest at this point in time.”

According to the Press Note, the government had made its prior approval mandatory for foreign investments from countries that share a land border with India to prevent the opportunistic takeovers of domestic firms following the pandemic.

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