Decline in net FDI in country as global economic activity slows down

Mumbai: Net foreign direct investments (FDI) in the country fell to $2.99 billion in the period from April to August of the current fiscal year as compared to $18.03 billion in the same period last year due to slowdown in global activity and increasing trends of remittances. Net FDI is the amount remaining after inflows less outflows.
According to Reserve Bank of India (RBI) figures, a total of $7.28 billion in FDI came into India from April to August, while $4.28 billion went out of the country.
Withdrawals by investors who invested through FDI in India stood at $19.63 billion in the first five months of the current financial year as against $11.41 billion in the same period last year.
The risk aversion in emerging markets is increasing as the high interest rate situation in the US and other developed countries is likely to continue for a long period, the Reserve Bank said in its report earlier. Capital flow will be hampered.
Globally, FDI inflows are also slowing down. Globally, mergers and acquisitions activity has also been at a ten-year low, with activity in equity markets dampened by high interest rates.
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