FDI: Bird Eye view

FDI & FEMA : Reinforcing Indian Economy

Part - 5

FDI: Bird Eye view

FDI inflows into India contracted by 38% to $22.42 billion in 2012-13 compared with $35.12 billion of FDI inflows the country witnessed in 2011-12, as per the data released by the department of industrial policy & promotion.

FDI: Bird Eye view

FDI: Bird Eye view

The top six sectors which received large FDI inflows during 2013-14 were: services ($4.83 billion), Hotel & tourism ($3.25 billion), Automobiles ($1.53 billion), Metallurgical ($ 1.46 billion), construction ($1.33 billion) and pharmaceuticals ($1.12 billion).

FDI: Bird Eye view

Mauritius remains the largest source country in terms of value of FDI inflows into India. In all, India received FDI worth $9.49 billion from Mauritius. That was followed by the UK ($7.87 billion), Singapore ($5.25 billion), Japan ($2.97 billion) and the US ($1.11 billion).

FDI projects ranking - Globally

FDI projects ranking - Globally

Comparative view in global context

Globally, India is at third rank in terms of FDI value and at fourth for the rank in terms of FDI projects. In terms of FDI value India is behind China (first), Brazil (second) and ahead of US & UK. In terms of FDI projects, US, UK & China are ahead of India.

Un-employment & rising inflation are major roadblocks in boosting investor’s confidence. Govt. has taken major steps to drain excess liquidity from the financial system to curb inflation. Further, the Govt. is working for increasing employment in private and public sectors.

China is the top most competitor of India

China is the top most competitor of India

China’s economy is export driven compared to domestic consumption driven Indian economy.

China has great exposure to economic shocks. Chinese manufacturers face rising wages and production costs. China is the largest competitor in terms of attractiveness.

Like India, China has same economic size, low cost production, and accesses to international market.

Contribution in FDI projects from sourced countries

Investments from US, Germany, UK & France contribute more than 50% in total FDI projects. Asia, Japan & UAE contribute around 15% in total FDI projects.

USA remains the leading investor with 30% share. Leading companies such as General Electric, Citi group & Honeywell have expanded their operations in India.

Contribution in FDI projects from sourced countries

Japan is the second highest in terms of FDI projects. Companies such as Toyota, Suzuki have made their presence in India.

UK is at third position with the share of 9%. Large British companies such as Vodafone, Marks & Spencer have made presence in India.

Investment in India - Function wise

In India, approx 70% goes into manufacturing sector, approx 20% goes in to services, 3% goes into strategic functions & remaining in others.

Investment in India - Function wise

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