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Posted 01 Jun 2024

2 min read

  • As per data released by Department for Promotion of Industry and Internal Trade (DPIIT), FDI inflows in 2023-24 contracts by 3.49% to $44.42 billion as compared with 2022-23.

Other Key Highlights 

  • Maharashtra received highest FDI followed by Gujarat and Karnataka in FY 2023-24.
  • Singapore was the top source of foreign inflows followed by Mauritius and USA in FY 2023-24.
    • Top 5 countries for FDI equity inflows into India during 2000-24 are Mauritius followed by Singapore, USA, Netherland, Japan.
  • Computer software & Hardware, followed by Service sector and Construction Activities received highest FDI in FY 2023-24
    • Top 5 sectors receiving highest FDI equity inflow during 2000-2024 are Services Sector, Computer Software & Hardware, Trading, Telecommunications, Automobile Industry.

About FDI

  • It is an investment made by a company or an individual in one country into business interests located in another country.
  • DPIIT is nodal Department for formulation of FDI policy in India.
  • FDI is permitted through Automatic route (Government approval not required) or Government route (approval required).
  • Foreign Currency Convertible Bonds, Foreign Institutional Investment with certain conditions and Global Depository Receipts are included in FDI.
  • FDI is prohibited in Lottery Business, Gambling and Betting, Chit funds, Nidhi company, Trading in Transferable Development Rights etc.

Significance of FDI

  • Stimulates economic growth, enables development in backward areas, ensures exchange rate stability, etc. 

Concerns regarding FDI in India

  • Most FDI inflow is concentrated in few states like Maharashtra & Karnataka, widening existing inequalities
  • FDI may lead to unfair competition and ultimately affect domestic companies.

Initiatives taken to promote FDI

  • Liberalization of FDI in sectors like Insurance, Power exchanges etc.
  • Investment promotion and facilitation through Invest India Programme.
  • Attracting foreign investment through Make in India.
  • Tags :
  • Foreign Direct Investment (FDI)
  • Make in India
  • Foreign Institutional Investment
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