Home > Current Affairs > National > FDI Equity Inflows Decline 24% To USD 20.48 Billion In Apr-Sep 2023

FDI Equity Inflows Decline 24% To USD 20.48 Billion In Apr-Sep 2023

Utkarsh Classes 22-11-2023
FDI Equity Inflows Decline 24% To USD 20.48 Billion In Apr-Sep 2023 Economy 4 min read

Foreign direct investment (FDI) equity inflow in the country has declined by 24 percent to $ 20.48 billion in the first six months (April-September) of the current financial year 2023-24.

  • This decline is mainly due to decline in FDI due to lower inflows into computer hardware and software, telecommunications, automobile and pharmaceutical sectors.
  • According to government data, foreign direct investment inflow during the first six months of the last financial year i.e. April-September was $26.91 billion.
  • From January to March this year, FDI witnessed a 40.55% drop, amounting to $9.28 billion. Whereas during April-June last year it had declined by 34 percent to $10.94 billion.
  • Department for Promotion of Industry and Internal Trade (DPIIT) data reveals a decline in foreign investment during the months of April, May, June, July, and August. Nevertheless, it surged to $4.08 billion in September, compared to $2.97 billion in the corresponding month last year.
  • FDI has seen a 15.5% decrease, totaling $32.9 billion, compared to $38.94 billion in April-June 2022.
  • Total FDI comprises equity inflows, reinvested income, and other forms of capital.

There has been a decline in FDI equity inflows from these five countries:

  • FDI equity inflows from major countries including Singapore, Mauritius, US, UK and United Arab Emirates (UAE) have declined during the six months of this financial year.
  • Investments from the Cayman Islands and Cyprus fell to $145 million and $35 million, respectively, during April-September 2023 from $582 million and $764 million in the same period a year ago.
  • On the contrary, there has been a rise in investments from the Netherlands, Japan, and Germany.

FDI inflows declined in these sectors:

  • FDI inflows have declined in computer software and hardware, trade, services, telecommunications, automobile, pharma and chemicals.

FDI inflows increased in these sectors:

  • However, construction (infrastructure) activities, construction development and metallurgical industry recorded growth in flows.

Position of Indian states in terms of FDI inflows:

  • In terms of FDI inflow, a decline was recorded in some states while an increase in foreign investment was recorded in some states.

FDI inflows declined in these states:

  • In terms of states, Maharashtra led in inflows during this period at $7.95 billion, although it marked a decrease from the $8 billion recorded in the corresponding period last year.
  • Similarly, foreign investment in Karnataka fell to $2.84 billion in April-September 2023 from $5.32 billion in the same period last year.
  • FDI witnessed a decline in the quarter in states/UTs such as Gujarat, Rajasthan, Delhi, Tamil Nadu, and Haryana.

Growth in FDI inflows was recorded in these states:

  • On the other hand, Telangana, Jharkhand and West Bengal recorded growth in FDI during the same period.
  • FDI inflows have been affected in 2022-23 due to rising interest rates globally and increasing global tensions.
  • FDI equity inflows had declined by 22 percent to $46 billion in the financial year 2022-23.

FAQ

Answer:- Foreign direct investment (FDI) equity inflow in the country has declined by 24 percent to $ 20.48 billion in the first six months (April-September) of the current financial year 2023-24.

Answer:- Foreign direct investment (FDI) equity inflow in the country has declined by 24 percent to $ 20.48 billion in the first six months (April-September) of the current financial year 2023-24.

Answer:- This decrease is mainly due to decline in FDI due to less inflow in computer hardware and software, telecommunication, automobile and pharmaceutical sectors.

Answer:- FDI inflows in 2022-23 have been affected due to increasing interest rates globally and increasing global tensions.

Answer:- Maharashtra received the highest inflow of $7.95 billion during this period, but it was less than $8 billion in the same period last year.

Answer:- An increase in FDI was recorded in Telangana, Jharkhand and West Bengal during this period.
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