The net foreign direct investment (FDI) in India — inflows minus the outflows — dropped sharply by 62.17 per cent to $10.58 billion in the financial year ended March 31, 2024 (FY24) from $ 27.98 billion in the previous year, reflecting higher repatriation of capital.
This is the lowest amount of net FDI into the country since 2007.
Gross inward foreign direct investment (FDI) remained stable at $ 71.0 billion during 2023-24 compared with $ 71.4 billion in Fy23, according to the Reserve Bank of India’s (RBI) provisional data.
RBI data showed FDI inflows in India was $26.55 billion and outflows were $ 15.96 billion in FY24. In FY23, FDI inflows were at $42.0 billion, while outflows had touched $14.02 billion.
According to the “State of Economy” report in RBI’s bulletin for May 2024 more than 60 per cent of the FDI equity flows were directed towards manufacturing, electricity and other energy, computer services, financial services and, retail and wholesale trade.
Singapore, Mauritius, the US, the Netherlands, Japan and the UAE contributed to more than 80 per cent of the flows. Net FDI declined to US$ 10.6 billion during 2023-24 from $ 28.0 billion a year ago, mainly reflecting higher repatriation.
Global FDI flows have been impacted by higher borrowing costs, deepening geo-fragmentation and rising protectionism in recent years.
Nonetheless, India is among the top 10 economies expected to experience high FDI momentum in 2024, “State of Economy” quoted fDi Intelligence. It is a foreign direct investment publication by FT Ltd providing an up-to-date review of global investment activity.
Since the onset of the COVID-19 pandemic, there has been a structural change in global investment patterns, shifting FDI flows from developed economies towards developing economies.
The share of global FDI capital expenditure originating from G20-Ems in 2023 rose to 14.9 per cent as compared with 8.2 per cent in 2003. Indian companies announced over 550 greenfield FDI projects abroad, the highest in any year before, RBI report added.
First Published: May 21 2024 | 7:45 PM IST
