Net FDI inflows touch record high of $34.9 bn in 2014-15
New Delhi: While foreign portfolio investments to India are slowing, net foreign direct investment (FDI) inflows, which are far more stable, have touched a record high of $34.9 billion in 2014-15, as made clear by the chart, compiled by Nomura Global Markets Research. In fact, net FDI inflows touched 1.7% of gross domestic product (GDP) in the just-ended fiscal year, up from 1.1% of GDP the previous year. The reason: more inbound FDI due to growing investor confidence in India and lower outbound FDI as global growth remains anaemic, said Nomura in a note on Tuesday. Foreign investment inflows to India are predominantly to infrastructure, mainly telecom, oil and gas, mining sectors, as well as the services sector.
In fact, FDI in manufacturing has remained lacklustre, although there were some inflows into the auto sector.
Higher FDI flows are good for India’s current account deficit and also help drive domestic investments. With the government opening up various sectors such as insurance and defence, these stable flows may continue this year as well.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.