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Foreign Direct Investment equity flows into India

  • IASbaba
  • July 30, 2022
  • 0
Economics, International Relations
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FDI inflows into India

  • Singapore (27.01%) and USA (17.94%) have emerged as top 2 sourcing nations in FDI equity flows into India in FY2021-22 followed by Mauritius (15.98%), Netherland (7.86%) and Switzerland (7.31%).
  • The Government has implemented several transformative reforms under the FDI policy regime across sectors such as insurance, defence, telecom, financial services, pharmaceuticals, retail trading, e-commerce, construction & development, civil aviation, manufacturing etc.
  • Despite the ongoing pandemic and global developments, India received the highest annual FDI inflows of USD 84,835 million in FY 21-22 overtaking last year’s FDI by USD 2.87 billion.
  • India is rapidly emerging as a preferred country for foreign investments in the manufacturing sector. FDI Equity inflow in Manufacturing Sectors have increased by 76% in FY 2021-22 (USD 21.34 billion) compared to previous FY 2020-21 (USD 12.09 billion).
  • Top 5 sectors receiving highest FDI Equity Inflow during FY 2021-22 are Computer Software & Hardware (24.60%), Services Sector (Fin., Banking, Insurance, Non Fin/Business, Outsourcing, R&D and others) (12.13%), Automobile Industry (11.89%), Trading 7.72% and Construction (Infrastructure) Activities (5.52%).
  • Top 5 States receiving highest FDI Equity Inflow during FY 2021-22 are Karnataka (37.55%), Maharashtra (26.26%), Delhi (13.93%), Tamil Nadu (5.10%) and Haryana (4.76%)
  • During FY 2021-22 FDI has been reported from 101 countries, whereas, it was reported from 97 countries during previous FY 2020-21.
  • In India FDI up to 100% is allowed in non-critical sectors through the automatic route, not requiring security clearance from the Ministry of Home Affairs (MHA).
  • Prior government approval or security clearance from MHA is required for investments in sensitive sectors such as defence, media, telecommunication, satellites, private security agencies, civil aviation and mining, besides any investment from Pakistan and Bangladesh.
  • All foreign investments are required to be in compliance with the applicable entry route, sectoral cap, attendant conditions, sectoral laws, Companies Act, 2013 and rules thereunder, pricing guidelines, documentation and reporting requirements.

Source: Pib.Gov

Previous Year Question

Q.1) With reference to the international trade of India at present, which of the following statements is/are correct? (2020)

  1. India’s merchandise exports are less than its merchandise imports.
  2. India’s imports of iron and steel, chemicals, fertilisers and machinery have decreased in recent years.
  3. India’s exports of services are more than its imports of services.
  4. India suffers from an overall trade/current account deficit.

Select the correct answer using the code given below:

  1. 1 and 2 only
  2. 2 and 4 only
  3. 3 only
  4. 1, 3 and 4 only

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