India's economy will grow 6% to 6.8% in fiscal year 2023-24, down from 7% projected for the current year, said the government's annual
Economic Survey
report, which was tabled in Parliament by Finance Minister Nirmala Sitharaman. The report said its baseline scenario for growth for 2023/24 was 6.5%, with nominal growth, which accounts for inflation, forecast at 11%.
The Economic Survey reviews the
economic and financial trends
of the country over the past year. It gives detailed data on all sectors, and analyses the trends in agricultural and industrial production, infrastructure, employment, inflation rate, trade, foreign exchange reserves and other economic areas.
The
services sector
witnessed a swift rebound in FY22, growing Year-on-Year (YoY) at 8.4% compared to a contraction of 7.8% in the previous financial year. This was largely due to growth in the contact intensive services sub-sector which registered sequential growth of 16% driven by the release of pent-up demand, ease of mobility restriction, and near-universal vaccination coverage, noted the survey.
As per the First Advance Estimates,
Gross Value Added
(GVA) in the services sector is estimated to grow at 9.1% in FY23, driven by 13.7% growth in contact-intensive services sector.
The Economic Survey observed that the bank credit to Services Sector saw a YoY growth of 21.3% in November 2022, the second highest in 46 months, with the improvement in vaccination coverage and recovery in the services sector.
The Survey observed that India’s services exports may improve as runaway inflation in advanced economies drives up wages and makes local sourcing expensive, opening up avenues for outsourcing to low-wage countries, including India.
Services exports registered growth of 27.7% during April-December 2022 as compared to 20.4% in the corresponding period last year.
The World Investment Report 2022 of UNCTAD places India as the seventh largest recipient of FDI in the top 20 host countries in 2021. India received the highest-ever FDI inflows of US$ 84.8 billion including US$ 7.1 billion FDI equity inflows in the services sector in FY22. “To facilitate investment, various measures have been undertaken by the Government, such as the launch of the National Single-Window system, a one-stop solution for approvals and clearances needed by investors, entrepreneurs, and businesses”, mentioned the Survey.
The entire aircraft movement in the country increased by 52.9% YoY between April and November 2022 as India resumed all regular international flights at full capacity towards the end of 2021-22.
The Economic Survey stated that notwithstanding the current impediments, such as rising interest rates on home loans and an increase in property prices, the sector witnessed resilient growth in the current year, with housing sales and the launch of new houses in Q2 of FY23 surpassing the pre-pandemic level of Q2 of FY20. “The recent government measures, such as the reduction in import duties on steel products, iron ore, and steel intermediaries, will cool off the construction cost and help to check the rise in housing prices”, mentioned the Survey.
The Survey noted that the IT-BPM revenues registered YoY growth of 15.5% during FY22 compared to 2.1% growth in FY21, with all sub-sectors showing double-digit revenue growth. Within the ITBPM sector, IT services constitute the majority share (greater than 51%). Exports (including hardware) witnessed a growth of 17.2% in FY22 compared to 1.9% growth in FY21, owing to the increased reliance of businesses on technology, the roll-out of cost-reducing deals and the use of core operations.
The industry recorded nearly 10% estimated growth in direct employee pool in FY22 with a highest-ever net addition to its employee base. “India’s massive digital infrastructure played a crucial role in driving technology adoption, with public digital platforms becoming the bedrock of India’s digital advantage”, stated the Survey.
India also took the lead with the fintech adoption rate of 87%, substantially higher than the world average of 64% as per the latest Global FinTech Adoption Index. The Survey stated that Neobanks have eased availability and provided access to financial services to MSMEs and underbanked customers and areas. The introduction of Central Bank Digital Currency (CBDC) will also significantly boost digital financial services. “Digitalising documents has also played a pivotal role in giving further impetus to digital financial services”, stated the Survey.
The Survey noted that India’s services sector growth which was highly volatile and fragile during the last 2 fiscal years, has shown resilience in FY23. The prospects look bright with improved performance of various sub-sectors like Tourism, Hotel, Real estate, IT-BPM, E-commerce etc. “The downside risk, however, lies in the external exogenous factors and bleak economic outlook in Advanced Economies impacting growth prospects of the services sector through trade and other linkages”, mentioned the Survey.
FAQs
In FY 2023, India received equity inflows worth US$46.03 billion. The total FDI inflows received in FY 2023, which includes equity inflows, reinvested earnings, and other capital sources, amounted to US$70.97 billion – a decrease from the US$84.83 billion recorded during FY 2022.
Which country has highest FDI in India 2023? ›
In FY 2023, Singapore accounted for maximum inward FDI in India at US$17.20 billion, followed by Mauritius (US$6.13 billion), the US (US$6.04 billion), UAE (US$3.35 billion), and the Netherlands (US$2.49 billion).
Which country has highest FDI in 2023? ›
Download Table Data
| Country | 2023 Population |
|---|
| India | 1,428,627,663 |
| China | 1,425,671,352 |
| United States | 339,996,563 |
| Indonesia | 277,534,122 |
222 more rowsIndia has recorded highest ever annual FDI inflow of USD 83.57 billion in the Financial Year 2021-22.
Why is India getting so much FDI? ›
According to the Department for Promotion of Industry and Internal Trade (DPIIT), India's cumulative FDI inflow stood at US$ 871.01 billion between April 2000-June 2022; this was mainly due to the government's efforts to improve the ease of doing business and relax FDI norms.
What is the FDI status of India? ›
Economic Survey 2023: India received the highest-ever FDI inflows of $ 84.8 bn in services in FY22. Economic survey by CEA V Anantha Nageswaran was tabled in the parliament on Tuesday by finance minister Nirmala Sitharaman, a day before she presents the budget for the next fiscal year.
What are the top 5 FDI sectors In India? ›
Top 5 sectors receiving highest FDI Equity Inflow during FY 2022-23 are Services Sector (Fin., Banking, Insurance, Non Fin/ Business, Outsourcing, R&D, Courier, Tech. Testing and Analysis, Other) (16%), Computer Software & Hardware (15%), Trading (6%), Telecommunications (6%) and Automobile Industry (5%).
Who are the 5 largest investors of FDI? ›
10 Countries That Receive the Most Foreign Direct Investment
- U.S.
- U.K.
- China.
- Netherlands.
- Ireland.
- Brazil.
- Singapore.
- Germany.
FDI in Figures April 2023
Nevertheless, the United States and China were the top two FDI destinations worldwide in 2022, followed by Brazil, receiving peak level of inflows partly due to increased reinvestment of earnings.
What is the trend In FDI inflows In India? ›
Despite the ongoing pandemic and global developments, India received the highest annual FDI inflows of USD 84,835 million in FY 21-22 overtaking last year's FDI by USD 2.87 billion. Earlier, FDI inflows increased from USD 74,391 million in FY 19-20 to USD 81,973 million in FY 20-21.
Foreign direct investment (FDI) is a category of cross-border investment in which an investor resident in one economy establishes a lasting interest in and a significant degree of influence over an enterprise resident in another economy.
What does the term FDI stand for? ›
Foreign Direct Investment (FDI) from the viewpoint of the Balance of Payments and the International Investment Position (IIP) share a same conceptual framework given by the International Monetary Fund (IMF).
Which state has highest FDI inflows in India? ›
The combined tally of investment of three years makes Maharashtra the most attractive investment destination, states the survey. The investment is more than Karnataka ( ₹2,93,149 crore, 331 projects) and Gujarat ( ₹ 2,36,866 crore, 602 projects), states the survey.
Which country has topped the FDI inflows in India? ›
Sector-wise FDI Equity Inflows during April-September 2022
During the first half of this fiscal, Singapore emerged as the top investor. It was followed by Mauritius, the U.A.E., the U.S.A., the Netherlands and Japan.
Which country is the maximum foreign direct investment inflow to India? ›
Singapore is ranked one FDI provider to India. The small island nation has invested $15.9 billion in FY22 which is accounted for 27 per cent of India's total FDI received. USA is India's second biggest investor with FDI of $10.5 billion, with 18 per cent of total FDI.
Why does the US get so much FDI? ›
The U.S. has the largest consumer market in the world, with a GDP of $20 trillion and 325 million people. Free-trade agreements with 20 other countries provide access to hundreds of millions of additional consumers. A strong and robust consumer market is a key reason the U.S. ranks top in the world for FDI.
Why is FDI declining in India? ›
Net FDI too declined by nearly 27 per cent to USD 28 billion in 2022-23 as compared with USD 38.6 billion a year ago, mainly due to moderation in gross foreign direct investment inflows and an increase in repatriation, RBI's latest monthly bulletin further added.
Which sector attracts highest FDI in India In last decade? ›
During the last decade, the services sector has attracted the highest FDI inflows of all sectors.
Which country has highest FDI in USA? ›
In 2021, no country had a higher foreign direct investment (FDI) position in the United States than Japan, followed by the Netherlands and Canada. At that time, Japan had over 690 billion U.S. dollars invested in the United States.
Which country invests most in USA? ›
The main investing countries in the U.S. are Japan, Germany, Canada, the United Kingdom, Ireland and France. Most of these investments are in manufacturing, financial and insurance activities, and trade and maintenance. In 2021, California received the most investment, followed by Massachusetts and New York (BEA).
Amazon is the leading global investor
US-based logistics giant Amazon remained the leading parent company for FDI in 2021 for the second year running, according to the Global FDI Annual Report 2022.
Who is the biggest investor in India? ›
Often referred to as the 'Big Bull', Rakesh Jhunjhunwala was one of the most popular and successful investors in the Indian stock market. Before entering the financial markets, Rakesh Jhunjhunwala qualified as a Chartered Accountant.
What are the problems of FDI inflows in India? ›
Some of the major impediments for India's poor performance in the area of FDI are: political instability, poor infrastructure, confusing tax and tariff policies, Draconian labor laws, well entrenched corruption and governmental regulations.
What is FDI in USA? ›
According to BEA, FDI in the United States is defined as the ownership or control, directly or indirectly, by one foreign person, or entity, of 10 percent or more of the voting securities of an incorporated U.S. business enterprise or an equivalent interest in an unincorporated U.S. business enterprise.
Is high FDI good or bad? ›
Foreign direct investment is often seen as an economic blessing for developing nations. However, new research reveals that it stimulates resource depletion, while fostering dependency on the income generated from that depletion.
Is high FDI good? ›
Economic growth
FDI boosts the manufacturing and services sector which results in the creation of jobs and helps to reduce unemployment rates in the country. Increased employment translates to higher incomes and equips the population with more buying powers, boosting the overall economy of a country.
What are the 3 most known types of FDI? ›
Foreign direct investments are commonly categorized as horizontal, vertical, or conglomerate. With a horizontal FDI, a company establishes the same type of business operation in a foreign country as it operates in its home country.
What is the rank of India among the top FDI destination? ›
India was the 9th largest recipient of FDI in 2019 according to World Investment Report 2020 by UNCTAD. India is also the biggest FDI host in South Asia and contributed largely to the overall FDI growth of 10% recorded in the region.
Is FDI increasing or decreasing in India? ›
India shall see FDI increase once the market is again ready to invest in growth stage companies." In comparison to inflows in 2021–2022, the yearly reduction equals 16.3% in 2022–2023. Gross FDI inflows increased by 10% from fiscal 2019–20 to USD 81.97 billion in 2021–22.
How much FDI does China receive? ›
In recent years, China has been the second largest recipient of foreign direct investments (FDI) worldwide, attracting approximately 181 billion U.S. dollars in 2021.
FDI EQUITY INFLOWS BY COUNTRY AND INDUSTRY
| Main Investing Countries | FY 2020/21 (April 2020-March 2021), in % |
|---|
| Singapore | 22.0 |
| USA | 8.0 |
| Netherlands | 7.0 |
| Japan | 7.0 |
4 more rowsFDI in service sector was increased to 46% in 2014–15. It is US $1.88 billion in 2017. Service sector includes banking, insurance, outsourcing, research & development, courier and technology testing. FDI limit in insurance sector was raised from 26% to 49% in 2014.
Why are FDI decreased in India? ›
New Delhi: Gross foreign direct investment (FDI) flows, for the first time in a decade, declined on an annual basis in 2022-23 to USD 71 billion mainly due to a slowdown in the global economy, according to the RBI data. The annual decline works out to be 16.3 per cent in 2022-23 compared to inflows in 2021-22.
Which is the highest FDI source in India? ›
Singapore is ranked one FDI provider to India. The small island nation has invested $15.9 billion in FY22 which is accounted for 27 per cent of India's total FDI received. USA is India's second biggest investor with FDI of $10.5 billion, with 18 per cent of total FDI.
Which country attracts the most FDI? ›
The United States is the top destination of inward foreign direct investment. Source: IMF Data, Coordinated Direct Investment Survey. Note: Chart shows inward FDI positions.
Is FDI in China higher than India? ›
According to the ministry of commerce & industry, China stands at 20th position with only 0.43% share or $2.45 billion total FDI equity inflow into India during April, 2000 to December, 2021.
Which country is getting highest FDI? ›
Top recipients of FDI inflows worldwide in Q3 2022 were the United States (USD 86 billion), Ireland (USD 37 billion) and the United Kingdom (USD 36 billion).
Why does Japan support India? ›
Exchange between Japan and India is said to have begun in the 6th century when Buddhism was introduced to Japan. Indian culture, filtered through Buddhism, has had a great impact on Japanese culture, and this is the source of the Japanese people's sense of closeness to India.
Who is the best friend of India? ›
Japan. Japan is one of India's greatest friends since the two countries retain spiritual ties in addition to conducting business and exchanging technologies due to Buddhism's expansion in Japan.
Which US companies are investing In India? ›
US in India
- Google. Google is a leading technology company with a presence across 50 countries. ...
- Microsoft Corporation. Leading technology company with 11,500 stores under 63 banners in 28 countries and e-commerce websites in 11 countries. ...
- Apple. ...
- Amazon. ...
- ExxonMobil. ...
- General Electric. ...
- PepsiCo. ...
- JP Morgan.
India may attract the eyes of overseas investors in 2023 as well on account of measures such as the rollout of the production-linked incentive (PLI) schemes and the projection of healthy economic growth. India has so far received healthy foreign direct investment (FDI) in 2022.
