Foreign direct investment (FDI) inflows into India witnessed a 13 percent decline to USD 32.03 billion in the April-December 2023 period, primarily due to reduced investments in sectors such as computer hardware and software, telecom, auto, and pharma, according to the latest government data.
Comparatively, FDI inflows stood at USD 36.74 billion during the corresponding nine months of the previous fiscal year.
However, inflows during the October-December quarter of the current fiscal year saw an 18 percent increase to USD 11.6 billion, compared to USD 9.83 billion in the same quarter of 2022-23.
The total FDI, encompassing equity inflows, reinvested earnings, and other capital, decreased by approximately 7 percent to USD 51.5 billion during the period under review, as opposed to USD 55.27 billion in April-December 2022, as per data from the Department for Promotion of Industry and Internal Trade (DPIIT).
During the nine-month period of this fiscal year, FDI equity inflows saw a decline from major countries like Singapore, the US, the UK, Cyprus, and the UAE. Conversely, investments increased from Mauritius, the Netherlands, Japan, and Germany.
Sector-wise, inflows contracted in several sectors including computer software and hardware, trading, services, telecommunication, automobile, pharma, and chemicals. On the other hand, sectors like construction (infrastructure), development, and power witnessed growth in inflows.
In terms of states, Maharashtra received the highest inflow of USD 12.1 billion during the period, compared to USD 10.76 billion in the same period a year ago. However, overseas capital inflows in Karnataka plummeted to USD 3.6 billion in April-December 2023 from USD 8.77 billion in the same period of the previous fiscal year.
FDI inflows also decreased in other states/Union Territories such as Delhi, Tamil Nadu, West Bengal, Rajasthan, and Haryana, while recording positive growth in Gujarat, Telangana, and Jharkhand.
Officials have attributed the decline in FDI inflows to factors like rising interest rates globally and deteriorating geopolitical situations. FDI equity inflows into India declined by 22 percent to USD 46 billion in 2022-23.
