In the Financial Year 2021-22, India received the largest annual FDI inflow of USD 83.57 billion. FDI intake into India was just 45.15 billion dollars in 2014-2015, compared to the greatest ever annual FDI inflow of USD 83.57 billion dollars in 2021-22, surpassing last year’s FDI by USD 1.60 billion despite the military intervention in Ukraine and the COVID-19 pandemic. Since FY03-04, when inflows were barely USD 4.3 billion, India’s FDI inflows have surged 20-fold.
The details of total FDI inflows reported during the last four financial years are as under:
| S. No. | Financial Year | Amount of FDI inflows(in USD billion) |
| 1. | 2018-19 | 62.00 |
| 2. | 2019-20 | 74.39 |
| 3. | 2020-21 | 81.97 |
| 4. | 2021-22 | 83.57 |
Furthermore, India is fast becoming a popular destination for foreign manufacturing investments. In comparison to the previous FY 2020-21, FDI equity inflow into manufacturing sectors surged by 76 percent in FY 2021-22 (USD 21.34 billion) (USD 12.09 billion).
The following trends in India’s FDI inflow confirm the country’s standing as a preferred investment location for international investors.
In compared to FDI inflow reported pre-Covid (February 2018 to February 2020: USD 141.10 billion), FDI inflow has increased by 23 percent post-Covid (March 2020 to March 2022: USD 171.84 billion).
In terms of top investor countries of FDI Equity inflow, ‘Singapore’ is at the apex with 27%, followed by U.S.A (18%) and Mauritius (16%) for the FY 2021-22.‘Computer Software & Hardware’ has emerged as the top recipient sector of FDI Equity inflow during FY 2021-22 with around 25% share followed by Services Sector (12%) and Automobile Industry (12%) respectively.
During FY 2021-22, the major recipient states of FDI equity inflow in the sector ‘Computer Software & Hardware’ are Karnataka (53 percent), Delhi (17 percent), and Maharashtra (17 percent). Karnataka is the top recipient state, accounting for 38% of total FDI equity inflows in FY 2021-22, followed by Maharashtra (26%), and Delhi (2%). (14 percent ). ‘Computer Software & Hardware’ (35 percent), ‘Automotive Industry’ (20 percent), and ‘Education’ (12 percent) accounted for the majority of Karnataka’s equity inflows in FY 2021-22.
The government’s actions over the last eight years have paid off, as seen by the increasing volumes of FDI influx into the country, which are setting new records. To ensure that India remains an attractive and investor-friendly destination, the government reviews the FDI policy on a regular basis and makes significant changes from time to time. The government has implemented a liberal and transparent FDI policy, with most sectors available to FDI under the automatic route. Reforms have lately been implemented in sectors such as coal mining, contract manufacturing, digital media, single brand retail trading, civil aviation, defence, insurance, and others to further liberalise and simplify FDI policy in order to provide Ease of Doing Business and attract investments. Reforms have lately been implemented in sectors such as coal mining, contract manufacturing, digital media, single brand retail trading, civil aviation, defence, insurance, and others to further liberalise and simplify FDI policy in order to provide Ease of Doing Business and attract investments.
Featured Image: Alamy
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