Foreign direct investment inflows into India have grown exponentially over the last two decades. The Total FDI Inflows (Equity + Reinvested earnings + Other Capital) increased from US$ 4.3 billion in 2003-04 to US$83.57 billion in 2021-22.
Measures taken by the Government of India in Foreign Direct Investment (FDI) policy reforms, investment facilitation and ease of doing business have positioned India as a preferred investment destination amongst global investors. As a result, India recieved its highest ever total FDI inflow of US$ 83.57 billion in 2021-22, up from US$ 81.72 billion during the year 2020-21, despite the adverse impact of military operation in Ukraine and COVID-19 pandemic. In fact, FDI inflow has increased by 23% post-Covid (March, 2020 to March 2022: US$ 171.84 billion) in comparison to FDI inflow reported pre-Covid (February, 2018 to February, 2020: US$ 141.10 billion).
As per the annual data released by Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry, the FDI Equity inflows into India during 2021-22 were recorded at US$58.773 billion.
Singapore continued to be the largest source of FDI in India during the year 2021-22, with US$15.88 billion, amounting to 27 per cent share in FDI Equity inflows investments, followed by the USA (US$ 10.55 billion; 18%) and Mauritius (US$ 9.39 billion; 16%).
Computer Software & Hardware has emerged as the top recipient sector of FDI Equity inflow during 2021-22 with US$ 14.461 billion (around 25% share) followed by Services Sector (US$ 7.131 billion; 12.1%) and Automobile Industry (US$ 6.994 billion; 11.9%) respectively.
Karnataka is the top recipient state with (37.5%) share of the total FDI Equity inflow reported during the year 2021-22 followed by Maharashtra (26.3%) and Delhi (13.9%).
The continuing growth trend in FDI Inflows is an endorsement of India’s status as a preferred investment destination amongst global investors.
Modern India, built on strong structural and economic principles, offers exciting new opportunities and fresh business objectives across a plethora of industries. Effective, robust reforms undertaken by Shri Narendra Modi’s Government have opened up sectors such as energy, technology, financial services, food processing, infrastructure, and transportation to private and foreign participation. This will drive economic growth and further shore up India’s ranking in the global arena. Strong measures taken by the Government have already secured India’s position as one of the fastest-growing major economies in the world.
The stimulus package for achieving the goal of self-reliant India (Atmanirbhar Bharat) announced by the Government to prepare the country for the post-Coronavirus world, included structural reforms in eight industries – Coal, Minerals, Defence Manufacturing, Civil Aviation, Power Sector, Space, Atomic energy, and Social Infrastructure – that will open up avenues for enhanced trade/investment activities.
The Government’s reformative measures are backed by the overwhelming support of India’s population – the second largest in the world. The confidence of the citizens has been boosted by the global recognition of the successes of the dynamic, growth-centric policies of the Government. For instance, India is ranked among the top 10 destinations for global FDI as per UNCTAD’s World Investment Report 2019. Further, India has risen by 79 spots over the past six years to reach the 63rd position on the World Bank’s Ease of Doing Business rankings 2020. Encouraged by the progress, governments, and private enterprises from around the world are seeking opportunities in India that will drive growth for all stakeholders. As per UNCTAD Global Investment Trends Monitor (UNCTAD GITM), January 2021, India registered a 13% rise in foreign direct investment (FDI) to US$57 billion in 2020 compared to the previous year – the highest among 153 economies included in the study.
As per the Global Innovation Index 2021 rankings, released by World Intellectual Property Organization (WIPO), India has been ranked 46th, up 2 spots since last year. In 2020, India entered the top 50 innovating countries for the first time since inception of the Global Innovation Index in 2007, improving its rank from 81 in 2015 to 48 in 2020. Innovation has been at the forefront of India’s battle against the unprecedented crisis created by the Covid-19 pandemic, and will be pivotal in driving the country’s resilience and self-reliance. The Minister of Commerce and Industry has called upon stakeholders in the innovation ecosystem to strive to take India to the top 25 in the Global Innovation Index. More details. The National Mission on Interdisciplinary Cyber-Physical Systems (NM-ICPS) has supported setting up of 25 Technology Innovation Hubs (TIH) across the country, boosting new and emerging technologies to power national initiatives in key areas.