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FDI is a major driver of economic growth and an important source of non-debt finance.
India’s Foreign Direct Investment (FDI) saw a significant jump in November 2020. FDI data released by the commerce ministry shows that total FDI in the month of November 2020 grew by a whopping 81 per cent to $10.15 billion against $5.6 billion in November 2019. FDI equity has also jumped to $8.5 billion as against $2.8 billion in November 2019, registering a growth of 70 per cent.
India has attracted total FDI inflow of $58.37 billion during April to November 2020. It is the highest ever for the first eight months of a financial year and 22 per cent higher as compared to the first eight months of 2019-20 ($47.67 billion).
FDI equity inflow received during FY2020-21 (April to November 2020) is $43.85 billion. It is also the highest ever for the first eight months of a financial year and 37 per cent more compared with the first eight months of 2019-20 ($32.11 billion), the data revealed.
India’s economy is projected to grow at 7.3 per cent in 2021, even as it is estimated to contract by 9.6 per cent in 2020 as lockdowns and other efforts to control the Covid-19 pandemic slashed domestic consumption, the UN has said. The World Economic Situation and Prospects 2021, produced by the United Nations Department of Economic and Social Affairs (UN DESA), said the world economy was hit by a once-in-a-century crisis — a Great Disruption unleashed by the Covid-19 pandemic in 2020.
FDI is a major driver of economic growth and an important source of non-debt finance for the economic development of India. It has been the endeavour of the government to put in place an enabling and investor-friendly FDI policy, the commerce ministry said.
The intent all this while has been to make the FDI policy more investor-friendly and remove the policy bottlenecks that have been hindering the investment inflows into the country. The steps taken in this direction have borne fruit, as is evident from the ever-increasing volumes of FDI inflows being received into the country, it said.
Measures taken by the Union government on the FDI policy reforms, investment facilitation and ease of doing business have resulted in increased FDI inflows into the country. The following trends in India’s FDI are an endorsement of its status as a preferred investment destination amongst global investors.
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