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Foreign direct investment (FDI) into India declined by 22 per cent to $46 billion in FY23, dragged by lower inflows in computer hardware and software, and automobile industry, according to the Department for Promotion of Industry and Internal Trade (DPIIT) data. The FDI inflows stood at $58.77 billion during FY22.
The overseas inflows during the March 2023 quarter plunged by 40.55 per cent to $9.28 billion.
The FDI equity inflows declined in January, February, and March in the last fiscal to $4.05 billion, $2.85 billion, and $2.38 billion, respectively as against $6.4 billion in January 2022, $4.61 billion in February 2022, and $4.6 billion in March last year.
Total FDI inflows, which include equity inflows, re-invested earnings and other capital, declined by 16 per cent to $70.97 billion in the last fiscal.
Also read: FDI plays an important part in the profitability of firms: RBI Paper
During FY23, Singapore emerged as the top investor with $17.2 billion in FDI. It was followed by Mauritius ($6.13 billion), the US ($6 billion), the UAE ($3.35 billion), the Netherlands ($2.5 billion), Japan ($1.8 billion), UK ($1.73 billion), Cyprus ($1.27 billion), Cayman island ($772 million), and Germany ($547 million), the data showed.
The FDI inflows have contracted in FY23 from Mauritius, the US, the Netherlands, the Cayman Islands, and Germany.
Though the computer software and hardware sector attracted the highest inflows of $9.4 billion during the last fiscal year, these inflows are down as compared to $14.5 billion in FY22.
Similarly, FDI in the automobile industry dipped significantly to $1.9 billion in FY23 as compared to about $7 billion in FY22.
Also read: Signing FTAs with an eye on FDI
The other sectors that recorded a dip in the inflows in the last fiscal include construction (infrastructure) activities and metallurgical industries.
However, the inflows have recorded growth in sectors, including services ($8.7 billion), trading ($4.8 billion), telecommunications ($713 million), pharma ($8.7 billion), 2 billion), and chemicals ($1.85 billion).
State-wise, though Maharashtra received the highest inflows of $14.8 billion during the last fiscal year, the inflows are down as compared to $15.44 billion in FY22.
Similarly, the overseas inflows in Karnataka plunged to $10.42 billion in FY23 as against $22 billion in FY22. Other States/UTs where FDI dipped in FY23 include Delhi, Tamil Nadu, Haryana, Telangana, and West Bengal.
On the other hand, FDI in Gujarat has increased to $4.71 billion in Fiscal 2023 as against $2.7 billion in FY22. FDI has also reported positive growth in Rajasthan.
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