India’s FDI inflow grew by 13% during April-August 2020: Commerce & Industry Ministry
This is due to Foreign Direct Investment policy reforms, ease of doing business
Despite a rough patch in the economy amid the COVID-19 pandemic, India received a total Foreign Direct Investment (FDI) inflow of US$ 35.73 billion from April to August 2020. This is the highest ever for the first five months of a financial year and 13 percent higher as compared to US$ 31.60 billion in the first five months of 2019-2020.
The FDI equity inflow received during the same period was US$ 27.10 billion. This is also the highest ever for the first five months of a financial year and 16 percent more compared to US$ 23.35 billion in the first five months of 2019-20, the Ministry of Commerce and Industry said on Tuesday.
The ministry pointed out that India has been able to increase the total FDI inflow by 55 percent from US$ 231.37 billion in 2008-14 to US$ 358.29 billion in 2014-20.
According to the data released by the ministry, FDI equity inflow also increased by 57 percent from US$ 160.46 billion during 2008-14 to US$ 252.42 billion during 2014-20.
The milestone was achieved because of the continuous measures taken by the government on the fronts of FDI policy reforms, investment facilitation, and ease of doing business. The following trends in India’s Foreign Direct Investment are an endorsement of its status as a preferred investment destination amongst global investors, the ministry said.
A recent survey by the Confederation of Indian Industries (CII) and EY backed the government data, saying that India is among the top three choices for overseas investment in the next two-three years and attributed the achievement to the ease in policy reforms by the government.
“Recent reforms in the country such as corporate tax cuts, ease of doing business measures, simplification of labor laws, FDI (foreign direct investment) reforms, and focus on human capital have emerged as the top drivers for fresh investments. Non-Indian HQ MNCs have also opined that major investment in infrastructure and 100 smart cities, as well as financial sector reforms, will also help in establishing India as a favorable destination for FDI," it said.
CII Director-General Chandrajit Banerjee said that India will be the next global investment hotspot with a high proportion of multinational companies placing it at the top of their investment agenda.
“The CII-EY survey results strongly indicate that India will be the next global investment hotspot with a high proportion of MNCs placing it at the top of their investment agenda. The recent major structural reforms, proactive government processes and the quick pickup in economic activity following unlock measures are contributing to global investor interest," he said.