Fifty percent decline in FDI in the current financial year

Mumbai: Net Foreign Direct Investment (FDI) in the country rose to 5.90 billion dollars in October, 2023 at a 21-month high. Strong gross inflows and low levels of investment withdrawals have led to an increase in FDI. In the current financial year, however, there has been a fifty percent decrease in FDI. In October 2022, the figure of net FDI was 1.16 billion dollars, while in September of the current year, this figure was 1.54 billion dollars.

The number of withdrawn investments from investments made in India decreased to 1.10 billion dollars in October. According to Reserve Bank data, it was 2.93 billion dollars in October 2022 and 3.43 billion dollars in September of the current year.

The highest flow of FDI in India has been seen from Mauritius, Singapore, Cyprus and Japan. More than 80 percent of the total FDI in October came from these countries.

Talking about the current financial year, in the period from April to October, the net FDI was 10.43 billion dollars, which was 20.76 billion dollars in this period of the last financial year, according to the Reserve Bank data.

Global economic slowdown and declining trade activity have affected inbound and outbound FDI flows. Investment opportunities remain low due to recession in developed markets.

Sectors receiving FDI equity flows in the country mainly include manufacturing, retail and wholesale trade, power and other energy and financial services sectors.

Globally, India is becoming the destination of choice for FDI today, said the Reserve Bank's bulletin.

India's outward FDI commitments declined by 19.6 percent to $1.55 billion in November 2023 as compared to $1.93 billion in October 2023. This figure is half compared to 3.67 billion dollars in November 2022. Outbound FDI, expressed as a financial commitment, consists of three components namely equity, loan and guarantee.

Equity commitments were $72.95 billion in November 2023 as against $1.69 billion a year ago and $87.04 billion in October. Loan commitments decreased to $18.50 million as compared to $30.06 million in November, 2022 and $25.04 million in the previous month.

Guarantees to foreign units declined to $63.73 million in November from $80.92 million in October. That was down significantly from $1.68 billion a year earlier, the data showed.