FDI inflow to India fell to 16% in FY23, first decline in a decade
Gross foreign direct investment (FDI) flows, for the first time in a decade, declined on an annual basis in 2022-23 to $71 billion, mainly due to a slowdown in the global economy, according to RBI data.
The annual decline amounts to 16.3% in 2022-23 compared to admissions in 2021-22.
Gross FDI inflows in 2021-22 amounted to USD 81.97 billion, up 10% from FY 2019-20.
The previous year-on-year contraction in FDI took place in 2012-2013, when inflows fell by 26% to USD 34.298 billion.
“Gross inward FDI flows amounted to $71 billion in 2022-23, registering a decline of 16.3% on an annual basis,” according to an article published in the latest RBI Monthly Bulletin.
Net FDI also fell by almost 27% to $28 billion in 2022-23, from $38.6 billion a year ago, mainly due to the moderation in gross inflows of foreign direct investment and an increase in repatriations, he added.
Manufacturing industry, computer services and communication services recorded the largest drop in FDI inflows compared to the previous year.
The main contributors to the decline in entries over the same period were the United States, Switzerland and Mauritius.
The bulletin quoted “fDi Intelligence”, to say that India was the second largest recipient of FDI (USD 26.2 billion) in the semiconductor industry for the year 2022, just behind the United States. (33.8 billion USD).
Massive investments in capital-intensive FDI projects are underway, in line with the Indian government’s efforts to develop the industry, according to the article.
He further said that foreign portfolio investors (REITs) became net buyers in domestic financial markets in April, primarily in the equity segment ($1.9 billion), which was supplemented by an influx into the debt segment ($0.2 billion).
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