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Since the last two years, foreign direct investment (FDI) inflows into Gujarat have remained subdued, despite the state topping the FDI charts in 2020–21.
The third year has been no different. In the first six months of the current financial year 2023–24, FDI flows into the State dipped by almost 30 per cent, which is only second to Karnataka, where FDI fell by almost 44 per cent. Gujarat attracted ₹18,884 crore between April and September, which is lower than the ₹26,866 crore FDI for the same period in 2022–23, according to state figures published by the Department for Promotion of Industry and Internal Trade (DPIIT).
While the overall FDI inflows into India have dipped by 20 per cent for the April–September period compared to the same period last year, Maharashtra has bucked the trend with a 5 per cent growth. Topping the FDI charts, Maharashtra attracted ₹65,502 crore for the first six months of the current financial year, while Gujarat stood in fourth place among States.
In 2020–21, FDI inflows into Gujarat peaked, with ₹1.62-lakh crore of investments flowing into the State. The State government had cited incentives offered by it under the new industrial policy as the reason for the performance during a year affected by the Covid pandemic. Thereafter, the state slipped from the pinnacle, attracting ₹20,169 crore in 2021–22 and ₹37,059 crore in 2022–23.
Officials in the finance department of the Gujarat government did not respond to calls. Professor Hemant Kumar Shah, an economist and former acting principal of Ahmedabad-based HK Arts College, said, “Gujarat has seldom been a top destination for FDIs. While Maharashtra has been the frontrunner, there have been years when States like Odisha have outperformed Gujarat in attracting FDI. The Vibrant Gujarat summits organised by the state were also meant to attract global investors to the State. But there has been limited success through these summits.”
Of the total FDI that has flowed into Gujarat this financial year, 90 per cent of it has been attracted by Ahmedabad district. The rest is spread across 13 odd districts, including Surat and Vadodara.
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