Global investors seem to be gung-ho about India after a change in government in May this year. Foreign investments have picked up in the months following the formation of the new government, compared with the corresponding period last year. Foreign Direct Investment (FDI) has jumped manifold in June-July this year, compared with the corresponding period last year.
Officials are confident that more investments are likely to pour in, especially in the wake of Prime Minister Narendra Modi's visit to the US. According to the US-India Business Council, India is likely to receive $41 billion from the US in the next three years.
By how much has FDI gone up?
Department of Industrial Policy and Promotion (DIPP) data says it has grown 75% – from $3.1 billion in June-July last year to $5.4 billion in June-July this year. In fact, it registered a 33% growth in June – from $1.4 billion last year to $1.9 billion in June this year.
Which sector attracted maximum FDI?
The telecom sector. In April-July this year, the sector saw inflows worth $2.33 billion. In the entire 2013-14 fiscal, total FDI in the sector – at $1.3 billion – was almost half of what it was in the current financial year. In the first four months of the previous fiscal, FDI in telecom stood at $12 million.
Will it further go up?
Yes. Japanese brokerage firm Nomura says it will be above $30 billion by the end of the financial year. Its projection is based mainly on the ease of doing business parameter. In its September note, the agency said, "Based on the current run rate, we estimate that net FDI inflows could rise above $30 billion in FY15 (amounting to 1.4% of GDP)."
Any other reasons?
With the government liberalising FDI norms in various sectors such as railways and defence, inflows will surely go up. The US is very keen on the country's smart city projects and plans to invest in three cities initially – Vishakhapatnam, Ajmer and Allahabad.
Which countries topped the list?
Mauritius had the topmost share in the country's FDI at 36%. It was followed by Singapore at 12% and the UK at 10%. Japan came fourth with 8% and the US 5%.
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