FDI inflow rises by 2% to a record $83.57 billion in FY22

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India received a record $83.57 billion foreign direct investment (FDI) in 2021-22 with about 2% year-on-year growth on the back of a rapidly growing information technology sector, with Karnataka attracting the largest flows followed by Maharashtra, while Singapore and the US emerged as the top two contributors in that order, the commerce and industry ministry said on Friday.

India’s total FDI inflow has been on the rise consistently despite the pandemic and several geopolitical disruptions in recent years. It was $81.97 billion in 2020-21, $74.39 billion in 2019-20, and $62 billion in 2018-19, official data showed.

In 2014-15, FDI inflows stood at $45.15 billion, compared to the highest-ever annual figure of $83.57 billion in 2021-22 despite Russia’s invasion of Ukraine and the Covid-19 pandemic, the government statement said.

“India’s FDI inflows have increased 20-fold since FY 03-04, when the inflows were $4.3 billion,” it said, adding that the country is emerging as a preferred destination for foreign investments in the manufacturing sector. FDI equity inflow in the manufacturing sector jumped 76% in 2021-22 ($21.34 billion) compared to $12.09 billion in 2020-21.

According to the data, Singapore is at the top in terms of investor countries with 27% of FDI equity inflows, followed by the US (18%) and Mauritius (16%) in 2021-22.

Computer software and hardware emerged as the top recipient sector of FDI equity inflows during 2021-22 with nearly 25% share, followed by the services sector (12%), and the automobile industry (12%), the ministry statement said.

In the computer software and hardware segment, a major FDI recipient was Karnataka (53%), followed by Delhi (17%) and Maharashtra (17%) in 2021-22.

“Karnataka is the top recipient state with 38% share of the total FDI equity inflow reported during the 2021-22, followed by Maharashtra (26%) and Delhi (14%), it said.

Much of the equity inflow to Karnataka was reported in the computer software and hardware sector (35%), automobile industry (20%) and education (12%).

“The steps taken by the government during the last eight years have borne fruit as is evident from the ever-increasing volumes of FDI inflow being received into the country, setting new records,” the statement said. The government reviews the FDI policy on an ongoing basis and makes significant changes from time to time, to ensure that India remains an attractive and investor-friendly destination, it added.

To liberalise and simplify the FDI policy and attract investments, reforms were undertaken recently across sectors such as coal mining, contract manufacturing, digital media, single brand retail, civil aviation, defence, insurance and telecom.



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