- Wednesday, March 12, 2025
By: Shubham Ghosh
SINGAPORE and the US have emerged as the two leading sourcing nations for Foreign Direct Investment (FDI) equity flows into India in the 2021-22 fiscal, the Narendra Modi government said on Thursday (28).
In a statement released the same day, the commerce and industry ministry said among the top five nations in the list of FDI equity flows into India in FY2021-22, Singapore (27.01 per cent) and the US (17.94 per cent) are followed by Mauritius (15.98 per cent), the Netherlands (7.86 per cent) and Switzerland (7.31 per cent).
The ministry also said that the United Nations Conference on Trade and Development (UNCTAD) World Investment Report 2022 showed in its analysis of the global trends in FDI inflows that India’s rank improved one position to reach the seventh among the top 20 host economies for 2021.
“India is rapidly emerging as a preferred country for foreign investments in the manufacturing sector. FDI equity inflow in manufacturing sectors have increased by 76 per cent in FY 2021-22 ($21.34 billion or £17.6 billion) compared to previous FY 2020-21 ($12.09 billion or £9.97 billion),” the ministry added.
“The government has implemented several transformative reforms under the FDI policy regime across sectors such as insurance, defence, telecom, financial services, pharmaceuticals, retail trading, e-commerce, construction & development, civil aviation, manufacturing etc.” it added.
The commerce ministry said despite the pandemic and other global developments India received the highest annual FDI inflows of $84,835 million (£70,027 million) in 21-22 FY, overtaking the last year’s FDI by $2.87 billion (£2.36 billion). FDI inflows went up from $74,391 million (£61,406 million) in FY19-20 to $81,973 million (£67,664 million) in FY 20-21.
“The government continues to liberalise investment restrictions, eliminate regulatory barriers, nurture international relations and improve business environment. Changes are made in the FDI policy after having consultations with stakeholders including apex industry chambers, associations, representatives of industries/groups and other organisations.
“While foreign investments are permitted under the automatic route in most sectors/activities, due to strategic reasons certain investments are either restricted or permitted under the Government approval route through a screening mechanism as per the prescribed framework,” the ministry said.
The top five sectors in India that received the highest FDI equity inflow during FY 21-22 are computer software and hardware (24.6 per cent), services sector (finance, banking, insurance, non-finance/business, outsourcing, R&D, courier, tech testing and analysis, others) (12.13 per cent), automobile industry (11.89 per cent), trading (7.72 per cent) and construction (infrastructure) activities (5.52 per cent).
Besides, the top five states that received the highest FDI equity inflow during FY 2021-22 are Karnataka (37.55 per cent), Maharashtra (26.26 per cent), Delhi (13.93 per cent), Tamil Nadu (5.10 per cent) and Haryana (4.76 per cent).
FDI was reported from 101 nations during FY 21-22 while in FY 20-21, it was reported from 97 countries, the government release said.
