FDI Equity Inflow up by 112% For April-July Period

India’s Foreign Direct Investment (FDI) has improved significantly for April- July period. The Ministry of Commerce and Industry stated that the FDI equity inflow grew by 112% in the first four months of FY 2021-22. The FDI for the April-July period of this fiscal year has doubled to USD 20.42 billion compared to USD 9.61 billion for the previous fiscal year period.

India has attracted a total FDI inflow of USD 27.37 billion for the April-July period of FY 2021-22, which is 62% higher compared to the total FDI inflow of USD 16.92 billion in the corresponding period of FY 2020-21. The total FDI comprises reinvested earnings, equity inflows, and other capital.

The automobile industry emerged as the top sector with a 23% share of the total FDI equity inflow for the April-July period. The computer and software at 18% total FDI equity inflow share emerged at second place, followed by the services sector at 10% share of the total FDI equity inflow.

The state of Karnataka is the top recipient state with a 45% share of the total FDI equity inflow, followed by Maharashtra at 23% and Delhi at 12% total equity inflow, respectively. Karnataka reported the majority FDI equity inflow at 87% under the automobile industry during the April-July period.

The government’s robust business environment and favourable policy regime has ensured that foreign capital keeps flowing into the country. It has taken several measures and initiatives to increase FDI inflows by relaxing FDI norms across sectors such as PSU oil refineries, defence, power exchanges, telecom, and stock exchanges.

The government’s measures on investment facilitation, FDI policy reforms, and ease of doing business resulted in India’s FDI inflows increase. The rise in FDI equity inflows indicates that India is a preferred destination for global investors. It will boost India’s economic growth and development. 

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For any clarifications/feedback on the topic, please contact the writer at mayashree.acharya@cleartax.in

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