Foreign direct investment (FDI) into India declined by 22% to $46 billion in 2022-23, according to data released by the Department for Promotion of Industry and Internal Trade (DPIIT). The dip has been attributed to lower inflows in the computer hardware and software, and automobile sectors. The total FDI inflows, which include equity inflows, re-invested earnings, and other capital, declined by 16% to $70.97 billion in 2022-23, down from $84.83 billion in the previous fiscal year. Singapore emerged as the top investor with $17.2 billion FDI followed by Mauritius, the US, and the UAE. The inflows contracted across sectors including construction, metallurgical industries, and infrastructure activities, while some growth was seen in services, trading, telecommunications, pharma, and chemicals.
The Department for Promotion of Industry and Internal Trade (DPIIT) is a central government department that functions under the Ministry of Commerce and Industry. It is responsible for promoting and facilitating foreign direct investment in India, besides monitoring industrial growth and development.
The DPIIT data was released by the Indian government as part of its efforts to promote transparency and accountability in the country. The government has been taking several measures to improve the investment climate in India, including streamlining regulations and reducing bureaucratic hurdles. Despite these efforts, however, the FDI inflows declined in 2022-23 due to the impact of the COVID-19 pandemic on the global economy.
The dip in FDI inflows in India highlights the need for the government to continue implementing policy measures to attract foreign investment in the country. The government should also focus on improving the ease of doing business in India by simplifying regulations and reducing red tape. By creating a more investor-friendly environment, India can attract more foreign investment and boost economic growth in the years ahead.