New Delhi: India received total foreign direct investment of USD 60.3 billion during April to December 2021 which is 10.6 per cent lower compared to the USD 67.5 billion of FDI received in the same period of 2020-21, according to a government’s data.
Equity inflow through FDI during April to December period of 2021-22 is USD 43.1 billion which is 16 per cent lesser than the USD 51.4 billion received in FY 2020-21, latest official data shows, even as the government continued to put in place an enabling and investor-friendly FDI policy and remove policy bottlenecks that have been hindering the investment inflows into the country.
Manufacturing, computer services, communication services, retail and wholesale trade and education, research and development are the sectors that attracted most of the investment with computer software and hardware leading with the highest FDI equity inflows of USD 10.25 billion.
Telecommunications received USD 0.58 billion, services sector retained the lead in FDI inflows with USD 5.34 billion, followed by trading with USD 2.98 billionand automobile industry with USD 5.96 billion. Foreign Direct Investment in construction (infrastructure) activities was to the tune of USD 1.58 billion while in the sector of construction development, townships, housing, built-up infrastructure and construction-development projects, FDI inflows were USD 0.09 billion. Drugs & pharmaceuticals saw USD 1.20 billion FDI, chemicals (other than fertilizers), USD 0.6 billion and hotel and tourism USD 0.64 billion of FDI.
According to a UNCTAD report in January 2022, India recorded a 26 per cent decline in FDI in 2021 as compared with the previous year since large mergers and acquisitions deals recorded in 2020 were not repeated. This was amidst a rebound in global FDI flows in 2021, up 77 per cent to an estimated USD 1.65 trillion, from $929 billion in 2020, surpassing their pre-COVID-19 level. The drop in FDI flows to India is also noted by a study by PHD Chamber which highlights net FDI inflows to India at USD 21.2 billion in the first half of 2021-22, lower than USD 23.9 billion in the first half of FY 2020-21. Portfolio investment recorded a net inflow of USD 4.3 billion in H1:2021-22 as compared with USD 7.6 billion a year ago, the report shows.
India had significantly gained in robust FDI earnings amid the pandemic, receiving USD 64 billion in FDI in 2020, as per the World Investment Report by UNCTAD released in June last year. It was the fifth-largest recipient of inflows in the world and a 27 per cent increase from USD 51 billion in 2019, pushed up by acquisitions in the information and communication technology (ICT) industry.
