In the first quarter, India experienced a 48% rise in Foreign Direct Investment (FDI) to $16.1 billion. Key sectors attracting FDI included services, software, and non-conventional energy. While some areas like computer software and trading saw declines, the overall FDI landscape remained strong. Singapore played a significant role as an FDI channel. Total FDI, including equity inflows, grew by 28% to $22.49 billion. This surge reflects increasing investor confidence, positioning India as an appealing investment hub for global stakeholders amidst promising growth prospects.
India's economy has seen a significant uptick in Foreign Direct Investment (FDI) equity flows, marking a 48% increase compared to the previous year. The latest data released by the Department for Promotion of Industry and Internal Trade reveals that FDI worth $16.1 billion poured into the country during the April-June quarter, with key contributions coming from the services sector, computer software, and non-conventional energy industries.
Among the sectors that attracted substantial foreign investor interest are automobiles, telecom, trading, pharmaceuticals, and chemicals. The services sector, encompassing financial services, banking, and business outsourcing, received FDI amounting to $3.9 billion in the first quarter of this year, compared to $6.6 billion in the same period last year.
While there were declines in FDI inflows in certain sectors, such as computer software and hardware, trading, and non-conventional energy, the overall FDI landscape remained robust. In computer software and hardware, FDI fell to $2.7 billion from $7.9 billion in the previous year, while trading witnessed a decline to $460 million from $3.8 billion. Similarly, non-conventional energy saw FDI decrease to $1.0 billion from $3.7 billion.
Singapore emerged as a significant conduit for FDI inflows, with a substantial portion of the $3.9 billion FDI in the first quarter passing through the country. Mauritius followed as the second-largest source of FDI, with inflows of $3.2 billion, and the Netherlands contributed $2.4 billion during the same period.
The total FDI, encompassing equity inflows, reinvested earnings, and other capital, grew by 28% to reach $22.49 billion in the first quarter of this fiscal year, up from $17.56 billion in April-June 2023-24. This positive trend comes after a slight decline of 3.5% in FDI equity inflows in the previous fiscal year, which amounted to $44.4 billion.
The surge in FDI signals growing investor confidence in India's diverse sectors, highlighting the country's attractiveness as a destination for foreign investment. With a thriving services industry and promising growth prospects in various sectors, India continues to position itself as a key player in the global economy, poised for further expansion and development in the coming years.
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