The Foreign Direct Investment (FDI) inflows have shown a persistent growth from $45.15 billion in 2014-15 to $81.97 billion in 2020-21, Minister of State in the Ministry of Commerce and Industry, Som Parkash, declared in a written reply in the Lok Sabha on Wednesday.
“To promote Foreign Direct Investment (FDI), the Government has put in place an investor-friendly policy, wherein most sectors are open for 100% FDI under the automatic route,” the Ministry of Commerce & Industry said in a statement.
According to the UN trade body, Foreign Direct Investment (FDI) flows to India in 2021 were lower by 26 per cent, primarily because large M&A deals in 2020 were not repeated.
“Further, the policy on FDI is reviewed on an ongoing basis, to ensure that India remains an attractive & investor-friendly destination. Changes are made in the policy after having consultations with stakeholders including apex industry chambers, Associations, representatives of industries/groups and other organizations,” it noted.
India has drawn the highest ever total FDI inflow of US$ 81.72 bn during the financial year FY 2020-21. Regarding the top investor countries, Singapore is at the apex with 29%, followed by the USA (23%) and Mauritius (9%) for the FY 2020-21. Computer Software & Hardware has emerged as the top sector during FY 2020-21 with around 44% share of the total FDI Equity inflow heeded by Construction (Infrastructure) Activities (13%) and Services Sector (8%) respectively.
Earlier, Net foreign direct investment documented the gross FDI moderated to USD 54.1 billion and a descending inflow of USD 24.7 billion in April-November 2021 due to slow equity investment, the Economic Survey stated.
Foreign direct investment in India is a major monetary source for economic development. Economic liberalisation commenced in India due to the 1991 economic crisis. Since then FDI has steadily increased in India, which subsequently generated more than one crore (10 million) jobs.