India’s economy is currently one of the fastest growing in the world. Because of this, India has long been the most attractive place to invest in the world. But in the Foreign Direct Investment (FDI) figures that have come out for the fiscal year 2023-24, there has been a decline in FDI within the country. India’s reputation as the most attractive destination for investment has also declined, or is there some other reason for the decline in FDI, let’s understand…
India’s foreign direct investment (FDI) declined 3.49 per cent to $44.42 billion in 2023-24. While in the 2022-23 financial year, FDI worth $46.03 billion arrived in the country. The Department for Promotion of Industry and Internal Trade (DPIIT), the government body that works on foreign direct investment, has published detailed figures in this regard.
Why did FDI decrease?
According to DPIIT data, the main reason for the decrease in FDI in the country is lower investment in the services, hardware and software, telecommunications, automobile and pharmaceutical sectors. However, there has been an improvement in FDI in the last quarter of fiscal year 2023-24. FDI inflows rose 33.4 per cent to $12.38 billion in the January-March quarter. While in the same quarter of the previous fiscal year 2022-23, it was $9.28 billion.
How much is the total amount of capital that enters the country from abroad?
Along with FDI inflows, the DPIIT has also released data on foreign equity investment, reinvestment of profits in the country and foreign equity. According to this, in 2023-2024 a total of 70.95 billion dollars of direct investment arrived in the country. This is less than the total investment of $71.35 billion for 2022-23. There was a 22 per cent decline in FDI from India in 2022-23. In the financial year 2021-22, the country had received the maximum foreign investment of $84.83 billion.
These countries invested
In fiscal year 2023-24, there was a decline in FDI received by India from Mauritius, Singapore, United States, Britain, United Arab Emirates, Cayman Islands, Germany and Cyprus. However, there has been an increase in investment from the Netherlands and Japan.
In the financial year 2023-24, Maharashtra received the highest FDI in the country at $15.1 billion. This figure was $14.8 billion in 2022-23. After this, Gujarat received an investment of $7.3 billion, which rose to $4.7 billion in 2022-23. There has also been an increase in FDI in Tamil Nadu, Telangana and Jharkhand. While FDI has fallen in Delhi, Rajasthan, Uttar Pradesh and Haryana.
