FDI inflow at all-time high of $83.57 bn in 2021-22; Karnataka top state
India has recorded the highest-ever annual FDI (foreign direct investment) inflow of $83.57 billion in the Financial Year 2021-22, the Ministry of Commerce & Industry said on Friday (May 20).
“In 2014-2015, FDI inflow in India stood at mere 45.15 USD billion as compared to the highest ever annual FDI inflow of USD 83.57 billion reported during the financial year 2021-22 overtaking last year’s FDI by USD 1.60 billion despite military operation in Ukraine and COVID-19 pandemic. India’s FDI inflows have increased 20-fold since FY 03-04, when the inflows were USD 4.3 billion only,” the ministry said in a press release.
Also read: Government reviews FDI policy to allow 20% FDI in LIC
According to the ministry. India is “rapidly emerging as a preferred country for foreign investments in the manufacturing sector”.
“FDI equity inflow in manufacturing sectors have increased by 76% in FY 2021-22 ($21.34 billion) compared to previous FY 2020-21 ($12.09 billion). The following trends in India’s FDI inflow are an endorsement of its status as a preferred investment destination amongst global investors,” it stated.
The FDI inflow increased by 23% post-Covid (March 2020 to March 2022: $171.84 billion) in comparison to the FDI inflow reported pre-Covid (February 2018 to February 2020: $141.10 billion) in India, according to the ministry.
In terms of top investor countries of FDI equity inflow, Singapore tops with 27%, followed by the US (18%) and Mauritius (16%) for the FY 2021-22. ‘Computer Software & Hardware’ has emerged as the top recipient sector of FDI equity inflow during FY 2021-22 with around 25% share followed by Services Sector (12%) and Automobile Industry (12%) respectively.
Under the sector ‘Computer Software & Hardware’, the major recipient states of FDI equity inflow are Karnataka (53%), Delhi (17%) and Maharashtra (17%) during FY 2021-22. Karnataka is the top recipient state with 38% share of the total FDI equity inflow reported during the FY 2021-22 followed by Maharashtra (26%) and Delhi (14%).
The majority of the equity inflow of Karnataka has been reported in the sectors ‘Computer Software & Hardware’ (35%), Automobile Industry (20%) and ‘Education’ (12%) during the FY 2021-22.
“The steps taken by the government during the last eight years have borne fruit as is evident from the ever-increasing volumes of FDI inflow being received into the country, setting new records. The government reviews the FDI policy on an ongoing basis and makes significant changes from time to time, to ensure that India remains attractive and investor friendly destination.
“Government has put in place a liberal and transparent policy for FDI, wherein most of the sectors are open to FDI under the automatic route. To further liberalise and simplify FDI policy for providing Ease of doing business and attract investments, reforms have been undertaken recently across sectors such as Coal Mining, Contract Manufacturing, Digital Media, Single Brand Retail Trading, Civil Aviation, Defence, Insurance and Telecom,” the ministry said.
