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India crosses $1 trillion in FDI inflows
Industry News- Dec 10,24
FDI equity inflows into the manufacturing sector during 2014–2024 surged to $165.1 billion, up 69% from the previous decade's $97.7 billion.
India has surpassed the $1 trillion mark in foreign direct investment (FDI) inflows for the period from April 2000 to September 2024, reaffirming its position as a leading global investment destination. Data from the Department for Promotion of Industry and Internal Trade (DPIIT) shows cumulative FDI, encompassing equity, reinvested earnings, and other capital, reached $1,033.40 billion during this timeframe.
Approximately 25% of the FDI originated from Mauritius, followed by Singapore (24%), the US (10%), and the Netherlands (7%). India received $177.18 billion from Mauritius, $167.47 billion from Singapore, and $67.8 billion from the US.
Key sectors attracting significant investments include services, computer software and hardware, telecommunications, trading, construction, automobiles, chemicals, and pharmaceuticals. Between 2014 and 2024, India drew $667.4 billion in FDI, marking a 119% increase compared to the $304.2 billion received during 2004–2014.
FDI equity inflows into the manufacturing sector during 2014–2024 surged to $165.1 billion, up 69% from the previous decade's $97.7 billion. Investments spanned 31 states and 57 sectors, with most industries permitting 100% FDI under the automatic route, except strategically sensitive areas.
The government continuously reviews FDI policies, making adjustments through stakeholder consultations to maintain India's appeal as an investment hub. Experts anticipate that macroeconomic stability, improved industrial output, and production-linked incentive (PLI) schemes will drive stronger FDI inflows in 2025, despite global geopolitical and economic uncertainties.
Avimukt Dar, Founding Partner, INDUSLAW, forecasts robust private equity activity in India's tech sector, supported by successful market exits. He suggests reforms in mergers and acquisitions (M&A) regulations to further attract foreign investors.
Rumki Majumdar, Economist, Deloitte India highlights the importance of infrastructure investment, workforce skilling, and digital ecosystem development to sustain FDI growth. Geopolitical shifts and global trade regulations could introduce volatility in capital flows, she warns.
FDI is permitted under the automatic route in most sectors, while specific industries like telecommunications, media, and insurance require government approval. Prohibited areas include gambling, lottery, chit funds, and tobacco-based manufacturing.
With large-scale investments needed for infrastructure and economic growth, FDI plays a crucial role in strengthening India’s balance of payments and stabilizing the rupee’s value. India remains a preferred destination for strategic investments, early-stage funding, and growth capital across regions, cementing its position in the global investment landscape.
(ET)
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