According to the Commerce and Industry Ministry, India has received 16 percent higher Foreign Direct Investment (FDI) during April-August period this year compared to the same period last year. In the first five months of financial year 2019-20, India had received FDI worth $23.35 billion, which has increased to $27.1 billion this year.
As per the ministry, the total FDI, which includes reinvested earnings, has increased by 13 percent to $35.73 billion. "It is the highest ever for the first 5 months of a financial year and 13 percent higher as compared to the first five months of 2019-20 ($31.60 billion)," it added. As far as the equity flows are concerned, they were augmented mainly by investments into Jio Platforms, the telecom arm of Reliance Industries which received $4.5 billion from global investors like Google.
“There have been a lot of quiet private equity investments taking place in the real estate sector, which are expected to continue. Moreover, several existing foreign investors have realized the need to ramp up local supply chains after the pandemic hit,” said Vikram Doshi, Partner (Tax and Regulatory issues) at PwC.
The ministry also stated that the total FDI inflow grew by 55 percent from $231.37 billion in 2008-14 to $358.29 billion in 2014-20. "FDI is a major driver of economic growth and an important source of non-debt finance for the economic development of India. It has been the endeavor of the government to put in place an enabling and investor friendly FDI policy. The intent all this while has been to make the FDI policy more investor friendly and remove the policy bottlenecks that have been hindering the investment inflows into the country," it said.
It said that the steps taken in this direction during the last six years have borne fruit as is evident from the ever increasing volumes of FDI inflows being received into the country. "Measures taken by the government on the fronts of FDI policy reforms, investment facilitation and ease of doing business have resulted in increased FDI inflows into the country. The following trends in India's FDI are an endorsement of its status as a preferred investment destination amongst global investors," the ministry said. (Source: PTI, The Hindu)