India's annual FDI (Foreign Direct Investment) reached its highest ever tally with an inflow of $81.97 billion in 2021-22, the Ministry of Commerce and Industry said on Friday.
The ministry stated that India is rapidly emerging as a preferred country for foreign investments in the manufacturing sector.
In comparison to FDI flow of $12.09 billion in 2020–21, FDI equity inflow into manufacturing sectors surged by 76% in 2021–22 to $21.34 billion. The ministry noted that FDI inflow has increased by 23% post-Covid (March, 2020 to March 2022: USD 171.84 billion) in comparison to FDI inflow reported pre-Covid (February, 2018 to February, 2020: USD 141.10 billion) in India. Singapore topped the list of investor nations with 27%, followed by the United States (18%) and Mauritius (16%) in the previous fiscal year.
Computer software and hardware drew the largest inflows of all sectors. According to the ministry, it was followed by the services sector and the automobile industry.
During FY 2021-22, the largest recipient states of FDI equity inflow in the 'Computer Software & Hardware' sector were Karnataka (53%), Delhi (17%), and Maharashtra (17%). Karnataka is the top recipient state with 38% share of the total FDI Equity inflow reported during the FY 2021-22 followed by Maharashtra (26%) and Delhi (14%). Majority of the equity inflow of Karnataka has been reported in the sectors `Computer Software & Hardware’ (35%), Automobile Industry (20%) and `Education’ (12%) during the FY 2021-22. The ministry went on to say that the government's actions over the previous eight years have paid off and further informed that the government analyses the FDI policy regularly and makes important modifications from time to time to ensure that India remains an attractive and investor-friendly location. Reforms have recently been implemented in sectors such as coal mining, contract manufacturing, digital media, single-brand retail trading, civil aviation, defence, insurance, and telecommunications to further liberalise and clarify FDI policy in order to provide ease of doing business and attract investments.
