New Delhi: The government on Friday said India recorded the "highest ever" annual foreign direct investment of $83.57 billion in 2021-22. In 2020-21, the inflows were $81.97 billion. FDI equity inflows in manufacturing rose 76% in FY22.
FDI increased by around 22% post-Covid from March 2020 to March 2022 at $171.84 billion, in comparison to the inflows of $141.10 billion reported pre-Covid from February 2018 to February 2020, according to a statement issued by the commerce and industry ministry.
The fiscal 2022 inflows exceeded the previous year's FDI by $1.6 billion, despite disruptions from military operation in Ukraine and the Covid-19 pandemic, it said.
FDI equity inflows in manufacturing sectors increased 76% in FY22 at $21.34 billion, compared to $12.09 billion in the year before.
Agencies"India is rapidly emerging as a preferred country for foreign investments in the manufacturing sector," the ministry said.
Singapore was the topmost investor in India last fiscal year, accounting for 27% of the FDI, followed by the US at 18% and Mauritius at 16%.
Computer software and hardware emerged as the top recipient sector of FDI equity inflows during the last fiscal year with an around 25% share, followed by the services and automobile sectors, both at 12%.
Karnataka was the top recipient state with a 38% share of the total FDI equity inflows reported during the 2021-22, followed by Maharashtra (26%) and Delhi (14%).
The government reviews the FDI policy on an ongoing basis and makes significant changes from time to time to ensure that India remains an attractive and investor friendly destination, the ministry said.
(Catch all the Business News, Breaking News Events and Latest News Updates on The Economic Times.)
Download The Economic Times News App to get Daily Market Updates & Live Business News.
Subscribe to The Economic Times Prime and read the ET ePaper online.
As a seasoned expert in international economics and foreign direct investment (FDI), my extensive knowledge and experience in this field enable me to provide a comprehensive analysis of the information presented in the article about India's FDI trends in the fiscal year 2021-22.
Firstly, it's crucial to emphasize the significance of the data provided by the government, highlighting India's achievement of the "highest ever" annual foreign direct investment of $83.57 billion in 2021-22. This figure represents a notable increase from the previous fiscal year, where FDI inflows were $81.97 billion. The growth in FDI is a positive indicator of foreign investors' confidence in India's economic landscape.
One noteworthy aspect is the substantial rise in FDI equity inflows in the manufacturing sector, registering a remarkable 76% increase in FY22, reaching $21.34 billion compared to $12.09 billion in the preceding year. This surge suggests a growing interest and investment in India's manufacturing capabilities, showcasing the country's appeal as a preferred destination for foreign investments in this sector.
Examining the broader timeline, the article underscores a 22% increase in FDI from March 2020 to March 2022, amounting to $171.84 billion. This post-Covid surge contrasts with the pre-Covid period from February 2018 to February 2020, where FDI inflows were reported at $141.10 billion. This comparison underscores India's resilience and attractiveness for foreign investors even in the face of global challenges such as the Covid-19 pandemic and geopolitical disruptions like the military operation in Ukraine.
The breakdown of FDI by investor country is particularly insightful. Singapore emerges as the top investor, contributing 27% of the total FDI, followed by the United States at 18% and Mauritius at 16%. This distribution reflects the diverse sources of foreign capital flowing into India, affirming its global appeal as an investment destination.
In terms of sectors attracting FDI, computer software and hardware lead the way, comprising approximately 25% of FDI equity inflows. The services and automobile sectors follow closely, each commanding a 12% share. This diversification across sectors highlights India's broad-based attractiveness and the diverse opportunities it offers to foreign investors.
Geographically, Karnataka stands out as the top recipient state, capturing a significant 38% share of the total FDI equity inflows in 2021-22. Maharashtra follows with a 26% share, and Delhi holds a 14% share. This regional distribution underscores the importance of specific states in driving foreign investment within the country.
Lastly, the government's proactive approach to reviewing the FDI policy continuously is emphasized. This highlights India's commitment to maintaining an investor-friendly environment, adapting to changing global dynamics, and ensuring that the nation remains an attractive destination for foreign capital.
In conclusion, the presented data paints a positive picture of India's FDI landscape, showcasing its resilience, diversification across sectors, and the attractiveness of specific regions for foreign investors. The continuous efforts by the government to adapt and enhance the FDI policy further reinforce India's position as a preferred destination for international investments.
