fdi: India remains attractive to FDI investors

Foreign direct investment (FDI) is growing annually in recent times, in contrast to the massive sales of foreign portfolio investors (FPIs). Total FDI inflows to FY22 were $ 83.6 billion, up from $ 82 billion a year ago. At FY20 it stands at $ 74.4 billion. The services and manufacturing sectors accounted for a large portion of FDI in FY22, the RBI said in its monthly bulletin. However, due to higher overseas investment by Indian entrepreneurs and repatriation of foreign investors, net FDI in FY22 has increased to $ 39.3 billion from $ 44 billion a year ago, the RBI said.

India’s growing FDI is about $ 570 billion.

“FDI investments generally focus on a country’s long-term prospects and are rarely withdrawn. The high inflow of FDI indicates that India is a bright destination for foreign investment, ”he said

Chief economist Madan Sabnavis. “There is potential in various fields like IT, finance, FMCG, auto, drugs, telecom etc. They can be VC funds that support startups here. ”

In the long run, FDI investors are not present in the trading segment.

Of the 1,200 global business leaders surveyed in the United States, the United Kingdom, Japan and Singapore, more than two-fifths plan to invest in India extra or for the first time, consulting firm Deloitte said in a report last year.

The US Federal Reserve has been withdrawing FPIs since it began the process of halting purchases of Treasury bonds and mortgage-backed securities to support the economy during the epidemic. Rising commodity prices in the Russia-Ukraine conflict have led inflation to tighten the financial situation by raising policy rates, accelerating the withdrawal of investment by portfolio investors. In 2022, FPIs have so far drawn 21.3 billion.

India’s foreign exchange reserves fell to 59 596 billion at the end of May 6 from a record 64 642.453 billion on September 3 last year, as the Reserve Bank of India (RBI) sold dollars from reserves to stem the rupee’s devaluation and curb foreign exchange volatility. .