FDI inflows up 22% in April-Dec 2020

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The government on Thursday said that India attracted total foreign direct investment (FDI) of $67.54 billion during April-December 2020, the highest ever for the first nine months of a financial year and 22% higher year-on-year.

FDI equity inflows rose 40% in the April-December of FY21 at $51.47 billion, the commerce and industry ministry said in a release.

Total FDI inflows including equity inflows, re-invested earnings and other capital were $55.14 billion in the first nine months of FY20 while FDI equity inflows were $36.77 billion.

“Measures taken by the government on the fronts of FDI policy reforms, investment facilitation and ease of doing business have resulted in increased FDI inflows into the country,” the ministry said, adding that the trends in FDI inflows are an endorsement of India’s status as a preferred investment destination amongst global investors.

As per the data, FDI inflows rose 37% on/year in the quarter ended December 31, 2021, at $26.16 billion with $9.22 billion coming in December.

Emphasising that the endeavour of the government is to put in place an enabling and investor-friendly FDI policy, the ministry said the intent all this while has been to make the FDI policy more investor-friendly and remove the policy bottlenecks that have been hindering the investment inflows into the country.

“Continuing on the path of FDI liberalization and simplification, the government has carried out FDI reforms across various sectors,” it said.

The Budget 2021-22 has liberalised the country’s insurance sector by increasing the FDI sectoral cap to 74% from 49%.

India’s high foreign inflows come at a time when the global FDI collapsed in 2020, falling 42% to an estimated $859 billion from $1.5 trillion in 2019, according to UNCTAD. Such a low level was last seen in the 1990s and is more than 30% below the investment trough that followed the 2008-2009 global financial crisis, the intergovernmental body said earlier this year.

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