Africa-Press – Mauritius. Foreign Direct Investment (FDI) inflows into India fell in FY23 amid a sharp in decline in equity flows from traditional sources like the US, Mauritius, Netherlands and Caymen Islands, but inflows from Singapore and the UAE rose significantly, official data showed.
FDI equity inflows from Mauritius fell to ₹48,895 crore, down from ₹69,945 crore registered in the previous fiscal. FDI from the US stood at ₹48,666 crore, down from ₹78,527 crore in FY22.
FDI from the Netherlands declined to ₹ 19,855 crore from ₹34,442 croreand inflows from Caymen Islands declined to ₹6,069 crore from ₹28,383 crore. However, total FDI inflows into India declined by 16% to ₹ 3.67 trillion during FY23, as compared to ₹ 4.37 trillion in FY22.
Economists said the Indian decline was part of a global FDI slow-down due to slower growth across countries. “India is not an anomaly. FDI comes in batches.
I am not too worried on the FDI front, as some of the things will materialise even though a lot is happening globally,” said D. K. Joshi, chief economist at CRISIL.
“But, India is better positioned for growth, as compared to many other countries. So, we will get growth and continue to attract FDI,” Joshi added.
Some experts said a large chunk of inflows from tax havens like Mauritius, Cyprus, Caymen Island and Singapore were actually investments rerouted through these countries by investors sitting elsewhere.
“It is often difficult to pinpoint where the actual investment is coming from,” said a senior market expert, who didn’t want to be named.
Rules and regulations set by the government in August 2022, aim to curb such practices. Earlier, the central government gave approvals on a case-by-case basis.
In terms of sectors, the top draws for FDI inflows in FY23 were computer hardware and software ( ₹74,718 crore) services ( ₹69,852 crore), trading ( ₹38,060 crore), drugs and pharma ( ₹16,654 crore), chemicals ( ₹14,662 crore), automobiles ( ₹15,184 crore), and construction/infrastructure ( ₹13,588 crore).
Among the states, Maharasthra topped the list for attracting the largest amount of FDI, followed by Karnataka, Gujarat, Delhi, Tamil Nadu, Haryana, Telangana, Jharkhand, Rajasthan and West Bengal.
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