By FMTeam India has experienced a significant 45% increase in Foreign Direct Investment (FDI) inflows, reaching $29.79 billion during the April-September period of the current fiscal year, up from $20.5 billion in the same timeframe the previous year. This growth is attributed to substantial investments in sectors such as services, computer software and hardware, telecommunications, and pharmaceuticals.
Quarterly Growth Analysis
In the July-September quarter, FDI inflows rose by approximately 43% year-on-year, totaling $13.6 billion compared to $9.52 billion in the corresponding quarter of the last fiscal year. The preceding April-June quarter saw an even higher increase of 47.8%, with inflows amounting to $16.17 billion.
Comprehensive FDI Figures
When considering total FDI—which includes equity inflows, reinvested earnings, and other capital—the figure escalated by 28% to $42.1 billion in the first half of this fiscal year, up from $33.12 billion during the same period in 2023-24.
Major Contributing Countries
The surge in FDI was significantly influenced by increased investments from several key countries:
- Singapore: $7.53 billion (up from $5.22 billion)
- Mauritius: $5.34 billion (up from $2.95 billion)
- Netherlands: $3.58 billion (up from $1.92 billion)
- United Arab Emirates (UAE): $3.47 billion (up from $1.1 billion)
- United States: $2.57 billion (up from $2 billion)
However, FDI inflows from Japan and the United Kingdom experienced a decline during this period.
Sectoral Distribution of FDI
Several sectors witnessed notable increases in FDI inflows:
- Services: $5.69 billion (up from $3.85 billion)
- Computer Software and Hardware
- Telecommunications
- Automobile
- Pharmaceuticals
- Chemicals
Additionally, the non-conventional energy sector attracted FDI inflows amounting to $2 billion.
Regional Allocation of FDI
Maharashtra emerged as the leading recipient of FDI, securing $13.55 billion during April-September 2024-25. Other significant beneficiaries included:
- Gujarat: Approximately $4 billion
- Karnataka: $3.54 billion
- Telangana: $1.54 billion
Implications for India’s Economy
The substantial increase in FDI inflows underscores India’s growing appeal as a favorable investment destination, reflecting the country’s economic resilience and investor-friendly policies. The diversified sectoral and regional distribution of these investments indicates a balanced economic development trajectory.
Conclusion
India’s impressive 45% growth in FDI inflows during the first half of the fiscal year highlights the nation’s robust economic fundamentals and its attractiveness to global investors. Sustaining this momentum will be crucial for achieving long-term economic growth and development.