Foreign direct investment (FDI) in India jumped 47.8 per cent to $16.17 billion in April-June this fiscal on healthy inflows in services, computer, telecom and pharma sectors, according to government data. FDI inflows were at $10.94 billion in April-June 2023-24.
The data showed that overseas inflows in May rose to $5.85 billion and in June to $5.41 billion from $2.67 billion and $3.16 billion, respectively, in the year-ago period. In April, FDI inflows were down marginally at %4.91 billion against $5.1 billion in April 2023.
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Total FDI, which includes equity inflows, reinvested earnings and other capital, grew by 28 per cent to $22.49 billion during the first quarter of this fiscal from $17.56 billion in April-June 2023-24, the Department for Promotion of Industry and Internal Trade (DPIIT) data showed.
During the period, FDI equity inflows rose from major countries, including Mauritius, Singapore, the US, the Netherlands, the UAE, the Cayman Islands, and Cyprus. However, inflows declined from Japan, the UK, and Germany. Sectorally, inflows rose in services, computer software, hardware, telecommunication, pharma, and chemicals.
The data also showed that Maharashtra received the highest inflow of $8.48 billion during the first quarter of this last fiscal year. It was followed by Karnataka ($2.28 billion), Telangana ($1.08 billion), and Gujarat ($1.02 billion). FDI inflows declined in Delhi and Rajasthan compared to the year-ago period.
Meanwhile, Moody’s Analytics said in a report FDI inflows into emerging market economies like India and China fell in 2023. The fall happened due to the shrinking of global investment flows and supply-chain chaos, surging inflation, and tighter funding conditions after the COVID-19 pandemic.
“The world’s second-largest recipient of FDI, China, saw a downturn in 2023. Inflows turned negative in the third quarter as withdrawals and downsizing outpaced new investments. More recent data showed a fresh decline in the second quarter of 2024,” the report said.
The report titled ‘Why FDI Is Shrinking’ said investment flows are being reshaped by economic fragmentation, trade and geopolitical tensions, industrial policies, supply-chain diversification and tighter regulations to thwart the usage of tax havens.
“FDI into India has also seen better days, falling in recent years despite the country’s push into manufacturing and notable investments from tech giants such as Apple Inc.,” the report added.
