New Delhi: Foreign direct investment (FDI) equity inflows into India rose 9% to a record $43.5 billion during fiscal year 2016-17, at a time when global FDI inflows are falling.
In the January-March quarter, however, FDI equity inflows fell 28% to $7.6 billion, data released by the Department of Industrial Policy and Promotion (DIPP) on Friday showed.
Mauritius remained India’s top source of FDI equity inflows at $15.7 billion, followed by Singapore at $8.7 billion during 2016-17. The services sector continued to attract the highest investment at $8.9 billion, followed by telecommunications which attracted $5.6 billion.
FDI inflows including equity capital of unincorporated bodies, reinvested earnings and other capital grew 8% to $60.1 billion in 2016-17.
Increased FDI inflows are largely attributed to “intense and bold” policy reforms the government undertook to bring pragmatism in the FDI regime, DIPP said in a note.
“The government in past three years has undertaken a number of reforms in different areas of economy. The scale of reforms can be gauged from the fact that during this period, 21 sectors covering 87 areas of FDI policy have undergone reforms. This has resulted in increased FDI inflows, which year after year is setting new records,” it said.
FDI equity inflows during the past three financial years (2014-15 to 2016-17) is $114.41 billion. This is an increase of 40% from $81.84 billion in the previous three fiscals (2011-12 to 2013-14), DIPP said.
FDI equity inflows received through the approval route in the three years of the Narendra Modi-led government amounted to $11.69 billion, 64% higher than the $7.15 billion received during the previous three years of the Manmohan Singh-led government.
Global FDI flows fell 13% in 2016 to an estimated $1.52 trillion as global economic growth remained weak and world trade volumes posted anaemic gains, according to the latest UNCTAD Global Investment Trends Monitor.