Statistics published by the Department of Industrial Policy & Promotion show that Gujarat attracted FDI of $482 million, or Rs 3,104 cr, between April and September 2017
Foreign Direct Investment (FDI), which touched a record high in Gujarat in the last financial year, seems to have dried up in the current year. As a result of this, Gujarat has fallen behind several other industrial states in terms of attracting foreign investment.
Statistics published by the Department of Industrial Policy & Promotion (DIPP) show that Gujarat attracted FDI of $482 million, or Rs 3,104 crore, between April and September 2017. Though the FDI inflows were higher than the same period of 2016-17, when they stood at $358 million (Rs 2,462 crore), they are a far cry from the all-time high of $3.36 billion (Rs 22,610 crore) achieved last year, and $2.24 billion (Rs 15,667 crore) in the year before that.
The state's share of the total FDI inflows of $25.35 billion (Rs 1.63 lakh crore) in the first half of the year was less than 2 per cent, as compared to nearly 8 per cent in the whole of last year.
In the last two years, the state had attracted large amounts of FDI in automobiles, in particular, and also in engineering, metallurgy and auto components, state's industries commissioner Mamta Verma, had told DNA earlier.
Because of the sharp fall, Gujarat has fallen to sixth position among states in attracting FDI in the first half of the current year, trailing Maharashtra, Delhi, Tamil Nadu, Karnataka and Andhra Pradesh.
Last year, with nearly 8 per cent share of the FDI pie, Gujarat had attracted the third highest FDI in the country, and was only behind Maharashtra and Delhi.
While industry insiders say the decline in FDI inflows reflects the general slowdown in the economy, government officials attributed the same to the assembly elections.
"Investors, not just foreign, but even domestic players, were in a wait-and-watch mode because of the uncertainty ahead of elections. This is the trend before every major election. But, now that the polls are over, and a stable government is in place, we can expect foreign investors to start rolling their plans. This will be visible in FDI numbers in the coming quarters," said a senior government official, requesting anonymity.
However, officials conceded that the state is unlikely to touch last year's record FDI figures this year, as no new major projects by any foreign investors are in the pipeline.
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In the last two years, the state had attracted large amounts of FDI in automobiles, in particular, and also in engineering, metallurgy and auto components, state's industries commissioner Mamta Verma, had told DNA earlier.
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