NEW DELHI: India has recorded the highest ever Foreign Direct Investment (FDI) in the financial year 2021-22. According to the Ministry of Commerce and Industry, India has received foreign direct investment (FDI) of $ 83.57 billion this year, which is the highest ever. Foreign investment of $ 81.97 billion was done in 2020-21. According to the ministry, India is gradually becoming a preferred destination for foreign investment.
According to the Ministry of Commerce and Industry, during this period, the highest 27 percent of foreign investment in India has come from Singapore, while the second place is from the US with 18 percent.
Further, 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 (USD 21.34 billion) compared to previous FY 2020-21 (USD 12.09 billion).
The following trends in India’s Foreign Direct Investment inflow are an endorsement of its status as a preferred investment destination amongst global investors.
It may be noted that FDI inflow has increased by 23% post-Covid (March, 2020 to March 2022: USD 171.84 billion) in comparison to FDI inflow reported pre-Covid (February, 2018 to February, 2020: USD 141.10 billion) in India.
In terms of top investor countries of FDI Equity inflow, ‘Singapore’ is at the apex with 27%, followed by U.S.A (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.
Similarly, computer software and hardware are the sectors where maximum foreign investment of 25 percent has taken place. The ministry has also claimed that foreign investment has increased 20 times in the last 20 years. Talking about the state, the maximum investment has been done in Karnataka.
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%). 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.