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Foreign Direct Investment (FDI) in India appears to be out of breath, with the growth rate of inflows reaching its lowest level in five years (3.8%) at $ 44.85 billion. dollars in 2017-2018.
According to the latest data from the Department of Policy and Industrial Promotion (DIPP), FDI in 2017-2018 has only increased by 3% to reach $ 44.85 billion.
Foreign capital inflows to the country increased by 8.67% in 2016-17, 29% in 2015-16, 27% in 2014-15 and 8% in 2013-14.
According to experts, it is essential to boost domestic investment and further facilitate business in the country to attract foreign investors.
Anil Talreja, Partner, Deloitte India said the weak growth of FDI in the consumer and retail sectors can be attributed mainly to uncertainty and to the complexity of the FDI policy. Retail companies are still hesitant to make the decision to invest in India, "he said.
India has made considerable progress in terms of ease of doing business, but it must reach a level creates enthusiasm for foreign investors, Talreja added.
Biswajit Dhar, a professor at Jawaharlal Nehru University, said, "The status of the economy reflects the scale of FDI in a country. In the last two years, we have seen a decline in the domestic investment rate and now, FDI is following this move. "
He said the government should take measures to boost domestic investment to attract foreign investors." A UNCTAD report also said that foreign direct investment in India had decreased from $ 40 billion in 2017 to $ 44 billion in 2016.
However, the outflows from India, the main source of FDI in Southeast Asia, are larger.The Secretary-General UNCTAD's Mukhisa Kituyi said: "Downward pressure on FDI and the slowdown in global value chains is a major concern for policymakers around the world, especially in developing countries." [19659002] The main sectors that received the most foreign inflows in the last fiscal year were services ($ 6.7 billion), software and hardware ($ 6.15 billion), telecommunicatio ns (6.21 billion), trade (4.3 billion) Mauritius has become the largest source of FDI in India with 15.94 billion dollars in 2017-18, followed by Singapore ($ 12.18 billion), the Netherlands ($ 2.8 billion). In addition, the data show that FDI inflows of $ 44.8 billion in 2017-2018 are the highest ever recorded for any fiscal year.
Foreign direct investment (FDI) is important India would need huge investments in the coming years to restructure its infrastructure sector to stimulate growth. The decline in foreign capital inflows could put pressure on the country's balance of payments and could also affect the value of the rupee.
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