New benchmark: FDI equity inflows cross $500 billion in India
In a development that shows India has emerged as a safe investment destination, Foreign Direct Investment (FDI) equity inflows crossed the $500 billion benchmark, reports PTI. Between April 2000 and September 2020, the country's inflows were recorded at $500.12 billion. The sectors that drew the maximum investment are services segment, computer software and hardware, telecommunications, trading, construction development, automobile, chemicals, and pharmaceuticals. Here's more.
The maximum investment came from Mauritius
The largest chunk, 29%, came via the Mauritius route. The inflows from Singapore, the US, the Netherlands, Japan, and the UK, were recorded at 21%, 7%, 7%, 7%, and 6% respectively. Germany, Cyprus, France, and the Cayman Islands emerged as the other big investors. India got $144.71 billion from Mauritius and nearly $106 billion from Singapore during the aforementioned period.
Since 2015-16, investment has only grown
It was noticed that FDI inflows surged drastically after 2015-16. In that fiscal, FDI of $40 billion was recorded, a substantial increase of 35% from the previous year. In 2016-17, 2017-18, 2018-19, and 2019-20, the amount was registered at $43.5 billion, $44.85 billion, $44.37 billion, and $50 billion, respectively. Nischal Arora, Partner- Regulatory, Nangia Andersen India, called the numbers encouraging.
Investors believe in India's strong economic fundamentals, said expert
"Looking back, the half-trillion-dollar FDI in India is an indication of foreign investor's firm belief in India's strong economic fundamentals, stable political outlook, and sustained economic growth which generated returns for investors even during the global recession of 2007-08," Arora told the news agency.
There's still a long way to go, felt another expert
Rajat Wahi from Deloitte India, said global investors have trust in India's economic story. "While we have improved significantly across many of these areas over the last decade, and especially over the last five years, there is still a long way to go for us to be able to compete with countries like China and other markets like Vietnam, Thailand, and Malaysia," he asserted.
People shouldn't break into celebrations just yet
In sharp contrast, Gunjan Shah, Partner, Private Equity, Merger & Acquisitions & General Corporate, Shardul Amarchand Mangaldas, chose to be cautious. Claiming that the numbers don't translate to increased confidence among investors, he said, "There is a lot of liquidity around the world right now and the real test would be to see if a higher proportion of that is being deployed in India."
