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FDI

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Foreign Direct Investment (FDI) in India

October, 2013

Introduction

Foreign investments provide a great impetus for growth to Indian economy. The continuous upsurge in foreign direct investments (FDI), allowed across the industries and sectors, has proven that foreign investors have faith in the resilience of Indian markets. A wise policy regime and positive business environment have also played catalytic role to ensure the continuous inflow of foreign capital in the Indian markets.

Various surveys and industry experts have revealed that India is amongst the top destinations for investments across the globe. Certain facts and figures, pertaining to latest FDI developments, have been discussed hereafter.

Key Statistics

  • India Inc witnessed a year-on-year (y-o-y) upsurge of 24.2 per cent in FDI to touch US$ 3.95 billion in April-May 2013 as against US$ 3.18 billion during the same period in 2012, according to statistics released by the Department of Industrial Policy and Promotion (DIPP).

    During 2012-13, India attracted FDI worth US$ 22.42 billion. Hotels and tourism, pharmaceuticals, services, chemicals and construction received the highest amount of FDI. The major contributors to the Indian FDI were Singapore, Mauritius, the Netherlands and the US.

    The Government of India has liberalised the FDI regime in about a dozen sectors, including telecom, power etc and have also relaxed investment norms in multi-brand retailing.
  • Private equity (PE) and venture capital (VC) firms remained bullish about India’s consumer goods and services sector. PE and VC investments increased by more than 46 per cent in the first half of FY14, with consumer companies in retail, e-commerce, consumer packaged goods and quick service restaurants raising US$ 609.39 million through 51 deals.
  • Meanwhile, Indian merger and acquisition (M&A) space witnessed substantial levels of deal activity in the first nine months of 2013. There happened 377 deals amounting to US$ 23.9 billion, according to a survey by tax advisory firm Grant Thornton.
  • India's foreign exchange (forex) reserves increased by US$ 1.51 billion to touch US$ 279.24 billion for the week ended October 11, 2013, showed the data from the Resrve Bank of India (RBI)’s Weekly Statistical Supplement. India's foreign currency assets (FCA), the biggest component of the forex reserves, increased by US$ 1.52 billion to US$ 250.85 billion for the week under review.