India remains attractive for FDI investors

Foreign direct investment (FDI) has been rising every year in contrast, with the heavy selling by foreign portfolio investors (FPIs) recently. Gross FDI inflows were at $83.6 billion in FY22, outperforming $82 billion a year earlier. It remained at $74.4 billion in FY20. Services and manufacturing sectors represented a major share of FDI in FY22, RBI said in its monthly bulletin.

However, net FDI moderated to $39.3 billion in FY22 from $44 billion a year ago, because of higher outward investment by Indian entrepreneurs and repatriation by foreign investors, RBI said.

 

India’s total FDI stands at around $570 billion.

 

“FDI investments regularly take a look at a long-term potential of a nation and are seldom withdrawn. The high flow of FDI indicates that India is a bright destination for foreign investment,” said Bank of Baroda chief economist Madan Sabnavis. “The potential is in several sectors, for example, IT, finance, FMCG, auto, drugs, telecom, and so forth. These investments are regularly made by organizations that look for JVs or take up stakes in domestic organizations. They could be VC funds that help start-ups here.”

 

Given the long-term view, FDI investors are present in the trading segment. Over two-fifth of the 1,200 global business leaders surveyed in the US, UK plans to make additional or first-time investments in India.