New Delhi, Mar 4 (KNN) Foreign direct investment (FDI) equity inflows to India declined 6 per cent year-on-year to USD 10.8 billion in the October-December quarter as global uncertainties continued to impact investment flows.
This represents a continuation of the downward trend observed in recent quarters, with the data indicating that both declining inflows and rising levels of repatriation and disinvestment remain persistent challenges.
The current trend suggests that more investor-friendly measures, including structural economic reforms, may be necessary to enhance FDI, particularly in India’s manufacturing sector.
Despite setting an ambitious target of achieving USD 100 billion in annual FDI, inflows have been inconsistent across quarters, with July-September recording USD 13.6 billion and April-June seeing USD 16.1 billion.
Nevertheless, for the April-December period overall, equity inflows showed a 27 per cent increase to USD 40.6 billion, according to data from the Department for Promotion of Industry and Internal Trade (DPIIT).
In the October-December quarter, the services sector maintained its position as the largest recipient of FDI with USD 1.5 billion, followed closely by computer hardware at USD 1.3 billion and trading at USD 613 billion.
Non-conventional energy is emerging as an increasingly attractive sector for investors, drawing USD 1.3 billion in equity flows during the quarter.
Singapore continued to be the primary source of FDI during the quarter, contributing USD 4.4 billion, while Mauritius and the United States followed with investments of USD 1.6 billion and USD 1.1 billion respectively.
Total FDI inflows for April-December, which encompass fresh equity, reinvested earnings, and other capital, reached USD 62.4 billion compared to USD 51.5 billion in the same period of the previous fiscal year.
However, at approximately USD 71 billion, gross FDI for FY24 fell below the annual average of USD 77 billion recorded during FY20-FY24. Both the industrial and services sectors currently show FDI-to-GDP ratios that remain below pre-pandemic levels.
(KNN Bureau)
