Foreign investment in India slowing but shift from China spells opportunity

Only few states drawing companies' attention to set up projects


India’s total FDI equity inflow, an important sub-component of the overall FDI number, dropped to $36.7 billion for the nine months ending December 2022, compared to $43.2 billion a year ago.

Anoushka SawhneySachin P Mampatta New Delhi/Mumbai
India’s headline foreign direct investment (FDI) numbers rose from $62 billion in 2018-19 to a record $84.8 billion in 2021-22.

This represents a 36.8 per cent increase in FDI since the pandemic began, but the growth is less impressive when one considers India’s economic growth in the interim. Net FDI flows are up from 1.1 per cent of gross domestic product (GDP) in 2018-19 to 1.2 per cent in 2021-22.

FDI represents long-term money that companies put to work in India by setting up factories and plants. The growth in such investments — important for technology transfer and the jobs they create — is not expected to change much relative to India’s economic size, according to the projections of the

First Published: Mar 10 2023 | 10:39 AM IST

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