India's FDI equity inflows witness 34% decline in April-June Quarter

Foreign direct investment (FDI) into India dipped by 34 per cent to $10.94 billion during April-June period this fiscal year, according to the Department for Promotion of Industry and Internal Trade (DPIIT). The DPIIT data indicated that, FDI inflows totaled $16.59 billion between April and June 2022–2023. The figures show that during April to June 2023–24, FDI from nations like Mauritius, Singapore, the US, and the UAE decreased.Inflows dipped in segments including computer hardware and software, trading, automobile and pharma.Maharashtra was the top destination for FDI, followed by Karnataka, Gujarat and Delhi.

India had gained one notch to emerge the seventh highest FDI recipient in calendar 2021 despite inflows shrinking about 30% to $45 billion from $64 billion in 2020, according to the United Nations Conference on Trade and Development. Global FDI flows recovered to pre-pandemic levels in 2021, reaching nearly $1.6 trillion.The FDI equity inflows are a crucial indicator of foreign investor sentiment and confidence in the Indian economy. The decline in these inflows reflects a potential shift in the global perception of India as an attractive investment destination.Several factors are speculated to have contributed to this decline. Economic experts point to the ongoing global economic uncertainty resulting from the COVID-19 pandemic as a potential dampening factor on foreign investment. Additionally, changes in regulatory policies, taxation, and other business-related conditions in India might have impacted the decision-making process of foreign investors.

(Ira Singh, Asstt Editor)