New Delhi: Mumbai and Ahmadabad are fast losing their sheen as top destinations for attracting foreign direct investment (FDI) into India, while New Delhi, Hyderabad ad Kolkata have fast emerged as favourite destinations for foreign investors.
Data released by the Department for Promotion of Industry and Internal Trade (DPIIT) on Tuesday showed FDI received by Mumbai declined sequentially from $19.7 billion in 2016-17 to $13.4 billion in 2017-18 and $11.4 billion in 2018-19. However, Mumbai still holds the top destination for FDI among Indian cities.
Similarly, FDI inflows received by Ahmadabad also slipped for the second year in a row, from $3.4 billion 2016-17 to $2.1 billion in 2017-18 and $1.8 billion in 2018-19. Bangalore and Chennai are also experiencing a fall in foreign inflows.
However, FDI inflows for New Delhi, which also includes data for Haryana and part of Uttar Pradesh, have been rising consistently, from $5.9 billion in 2016-17 to $7.7 billion in 2017-18 and $10.1 billion in 2018-19. New Delhi is fast closing up with Mumbai and may replace it as the top FDI destination in a year or two.
Kolkata has proved to be the dark horse, garnering $1.2 billion in foreign direct investment in 2018-19, against just $218 million a year ago, a near six-time jump.
Data released by the DPIIT on Tuesday showed FDI equity inflows into India declined 1% to $44.4 billion in the year to 31 March, signalling a squeeze in long-term foreign investment into the country.
The decline in FDI inflows comes at a time when domestic indicators already point towards a slowdown in consumption and investment activity. India’s economy grew at the slowest pace in five quarters at 6.6% in the three months ended December, prompting the statistics department to trim its 2018-19 forecast from the 7.2% previously forecast to 7% in February. The first set of macro data the new government will have to deal with is the fourth-quarter GDP data (to be announced on 31 May) that may further decelerate to 6.4%.