FDI equity inflows surge 28 per cent in Q1FY20

According to the data released by Department for Promotion of Industry and Internal Trade, foreign direct investment (FDI) in equity into India surged 28 per cent to US$ 16.33 billion (Rs. 1,13,511 crore) during the April-June quarter of 2019-20. Total FDI (Equity inflows, re-invested earnings and other capital) during Q1FY20 stood at US$ 21.31 billion. The largest FDI equity inflow was witnessed in June 2019, which stood at US$ 7.282 billion (Rs. 50,567 crore).

Mauritius accounted for 32 per cent (Rs. 32,484 crore) of overall FDI equity inflows, followed by Singapore which contributed 20 per cent (Rs. 37,106 crore) during April-June 2019.           

Top sectors that attracted FDI equity inflow during Q1FY20 were service sector and computer, software & hardware sector, which accounted for 18 per cent and 9 per cent of inflows, respectively.

It is clear that FDI is important as India will require huge investments in the coming years to overhaul its infrastructure sector to boost growth. In 2018-19, FDI inflows had declined for the first time in six years, declining by 1 per cent to US$ 44.37 billion. To ensure that India does not fall short of investments, government has been taking several measures to boost FDI inflows. Recently, the government relaxed foreign investment norms in sectors like brand retail trading, coal mining and contract manufacturing, in order to boost the ailing economy.