Foreign direct investment (FDI) into India has so far not been affected by the shenanigans in Europe or the slowdown in the economy. As the chart shows, foreign direct equity investment in the county during the first half of the current fiscal year is almost equal to the entire foreign direct equity investment for 2010-11. Despite all the talk about a lack of confidence in the Indian economy, foreign investors have so far voted with their money for India.
Of course, things are not so rosy on the portfolio investment front. But then, FDI is far more preferable than fickle portfolio flows. The pace of FDI inflows, however, seems to have decelerated in the last few months. FDI inflow for September 2011, for instance, was below that of September 2010. It remains to be seen whether foreign investment will be quite so buoyant despite a rapidly slowing economy.
Graphic by Ahmed Raza Khan/Mint
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