Gujarat slips from top to sixth place among states in FDI inflow (2024)

FAQs

Gujarat slips from top to sixth place among states in FDI inflow? ›

A year after topping the list of states in attracting Foreign Direct Investments (FDI), Gujarat has fallen to the sixth place behind Karnataka, Maharashtra, Delhi, Tamil Nadu and Haryana, attracting a mere Rs 20,169 crore in 2021-'22.

The State received ₹71,858 crore of FDI inflows during the same period of FY22. FDI inflows into Gujarat during the first three quarters of the current fiscal more than doubled to ₹32,349 crore compared to ₹15,321 crore in the corresponding quarters of the previous fiscal.

Factors attracting foreign direct investment in Gujarat:

Gujarat has the highest number of airports in the country. The state provides excellent network of roads. Professional services to the investors are provided in Gujarat. The state is highly industrialized.

The investment is more than Karnataka ( ₹2,93,149 crore, 331 projects) and Gujarat ( ₹ 2,36,866 crore, 602 projects), states the survey. When it comes to inflow of FDI, Karnataka is in top position.

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.

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.

Dholera Special Investment Region (DSIR) is a Greenfield industrial planned city in Gujarat's Ahmedabad district, around 100 kilometers to the south-west. A legal framework known as the Special Investment Region Act 2009 was made by the Government of Gujarat.

As a result, Gujarat is one of the wealthiest states in India thanks to its robust industrial foundation, well-developed agricultural sector, initiatives to support entrepreneurship and small business development, strategic location, and hospitable political climate.

The Arabian Sea borders the state on the west and the southwest. Gujarat is one of the leading industrialised states in India. Gujarat is considered the petroleum capital of India due to presence of large refining capacity set up by private and public sector companies.

₹−44,930 crore (US$−5.6 billion) 1.8% of GSDP (2023–24 est.) ₹2.25 lakh crore (US$28 billion)(2023–24 est.) ₹2.7 lakh crore (US$34 billion)(2023–24 est.) Gujarat is ranked number one in the pharmaceutical industry in India, with a 33% share in drug manufacturing and 28% share in drug exports.

Which state has the highest FDI inflow? ›

India received $142.29 billion in foreign direct investments (FDI) between 2019 and 2022 up to which data is available for the entire financial year. Of this, 87.4% or $124.4 billion of the FDI has flown into just 5 states: Maharashtra, Karnataka, Gujarat, Delhi, and Tamil Nadu.

The correct answer is Services Sector. For economic growth, Foreign Direct Investment (FDI) has been a major non-debt financial resource for the economic development of India.

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.

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.

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%).

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.

There many regions in Gujarat state such as Kutch region, Saurashtra region, North region, South region and central region. All regions structure the state Gujarat.

Gujarat is politically divided in five regions - Saurashtra, Kutch, north Gujarat, central Gujarat and south Gujarat.

Gujarat contributes around 20 percent to India's industrial production and merchandise exports and the state's ports handle about 40 percent of India's cargo. In this, Gujarat benefits from having India's longest coastline at 1600km or 990 miles.

Are Gujarati people wealthy? ›

Singapore: Gujaratis seem to be among the most dominant communities when it comes to wealth creation, with Ambanis, Adanis, Shanghvis and Patels cornering a large number of top positions on the list of India's richest 100 released by Forbes today.

Romesh T. Wadhwani (Net worth: $5.1 billion) His family shifted from Pakistan to India during the 1947 Partition. Today, Wadhwani is the richest Gujarati in America.

Even though Covid took over India and the economy suffered, Gujaratis seem to have coped up, and robustly so. The biggest wealth gainers of India according to IIFL Wealth Hurun India Rich List 2022 are Gujaratis.

It is renowned for its beaches, temple towns and historic capitals. Wildlife sanctuaries, hill resorts and natural grandeur are gifts of Gujarat. Sculpture, handicrafts, arts, festivals also make the state rich.

Gujaratis have the willingness to do anything, explore the blind spots in businesses and they do not give up. They have the ability to get along with people of vastly different cultures.

Gujarat is rich in minerals, including limestone, manganese, gypsum, calcite, and bauxite. The state also has deposits of lignite, quartz sand, agate, and feldspar.

Gujarat has been among the fastest growing states even in the past. Despite poor rainfall, it has made strides in agriculture. Unlike Punjab and Haryana, states which launched the first Green Revolution with government support, Gujarat's agricultural transformation came via the market route.

The main crops grown in Kharif season are Great Millet, Bajra, Maize, Paddy, Groundnut and in Rabi season these are Cotton, Wheat, Mustard, Cumin and Vegetables. Besides, Sugarcane is also grown in some districts.

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.

Which US states are best for FDI? ›

Minnesota comes in first with a 46.3 percent FDI employment growth rate. Job growth in Minnesota is more than double the national rate. International companies like Rolls-Royce have accelerated Minnesota's job growth.

By region, Europe contributed 70.0 percent of new investment in 2021. By U.S. state, California received the most investment, totaling $64.1 billion, followed by Massachusetts ($53.8 billion) and New York ($34.2 billion).

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).

FDI Creates Imbalance

FDI is often concentrated either in the richer states of India or in the high skill sectors. This imbalance leads to a probable increase in the economic gap between the rich and the poor.

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.

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.

Many studies show that China is one of the most important countries for FDI inflow due to its improved infrastructure [7], continuously open market [8] , strengthened property rights protection [9,10], rapid expansion of economic scale, and competitive cost advantage [11].

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.

Labor is cheap, which lowers production costs and increases competitiveness. The country's purchasing power is enormous. These elements will undoubtedly entice any investor. No multinational can overlook the fact that key manufacturing sites and key suppliers are easily accessible from Indian manufacturing hubs.

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.

What is Gujarat GDP? ›

Gujarat is poised to grow at 15.5 per cent during the current fiscal 2022-23 and has targeted to almost double its Gross State Domestic Product (GSDP) to Rs 42 lakh crore in the next five years, states data tabled in the state legislature along with the annual budget for financial year 2023-24.

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).

Mauritius (26%), Singapore (23%), USA (9%), Netherland (7%) and Japan (6%) emerge as top 5 countries for FDI equity inflows into India FY 2022-23. 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.

The US replaced Mauritius as the second-largest source of foreign direct investment (FDI) into India during 2020-21 with inflows of $13.82 billion, according to government data. Singapore remained the top source of foreign direct investment into the country for the third consecutive fiscal at $17.41 billion.

The US replaced Mauritius as the second largest source of foreign direct investment into India during 2020-21 with inflows of USD 13.82 billion, according to government data. Singapore remained the top source of foreign direct investment (FDI) into the country for the third consecutive fiscal at USD 17.41 billion.

Gujarat has been among the fastest growing states even in the past. Despite poor rainfall, it has made strides in agriculture. Unlike Punjab and Haryana, states which launched the first Green Revolution with government support, Gujarat's agricultural transformation came via the market route.

Gujarat is the land of rich handicrafts like Patola weaving, khadi, bandhani, block printing, embroidery, namda, rogan painting, matani pachhedi, woodcrafts, metal crafts, bamboo crafts, pithora, pottery and many more handicrafts. Gujarat celebrates all regional fairs and festivals with great fervor and spirits.

The economy of Gujarat is the fourth-largest in India, with a gross state domestic product (GSDP) of ₹16.55 trillion (US$210 billion) and has the country's 10th-highest GSDP per capita of ₹215,000 (US$2,700). Gujarat ranks 21st among Indian states and union territories in human development index.

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.

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 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).