After contracting for a year, foreign direct investment (FDI) inflows into India picked up in FY20 to grow at 13% as Cayman Islands emerged as a major source of foreign investment into the country.
Data released by the DPIIT showed India’s FDI equity inflows jumped to $50 billion in FY20 from $44.4 billion a year ago.
Including reinvested earnings, FDI in FY20 grew 18% to $73.4 billion.
“In another strong vote of confidence in “Make In India", total FDI into India grew 18% in 2019-20 to reach $73 billion. Total FDI has doubled from 13-14 when it was only $36 billion. This long term investment will spur job creation," commerce minister Piyush Goyal tweeted.
During the year, FDI inflows from Singapore dropped from 16.2 billion in FY19 to 14.7 billion in FY20, even as it held to its number one rank as source of foreign investment into India. FDI inflows from Cayman Islands tripled in FY20 to $3.7 billion from $1 billion a year ago.
British overseas territory the Cayman Islands, the United States and Switzerland do most to help the globe's richest citizens hide and launder money, according to a study by Tax Justice Network.
The Cayman Islands, which is close to Cuba and was ranked in the study as the most prominent centre for financial secrecy, hosts more than 100,000 companies, a number that outstrips the local population, a Reuters report said.
While services sector ($7.8 billion) continued to attract the highest FDI inflows into India in FY20 with computer hardware and software sector ($7.7 billion) coming a close second, FDI into the services sector saw a dip during the year compared to $9.2 billion a year ago. Surprisingly, FDI into the hotel and tourism sector almost tripled jumping to $2.9 billion in FY20 from $1 billion a year ago.
The United Nations Conference on Trade and Development in a report published in March said the coronavirus outbreak could cause global FDI to shrink by 5%-15% to their lowest levels since the 2008-2009 financial crisis, should the epidemic continue throughout the year.