FDI inflows from traditional sources see a decline in FY23
₹48,895 crore, down from ₹69,945 crore registered in the previous fiscal. FDI from the US stood at ₹48,666 crore, down from ₹78,527 crore in FY22. FDI from the Netherlands declined to ₹ 19,855 crore from ₹34,442 croreand inflows from Caymen Islands declined to ₹6,069 crore from ₹28,383 crore.
On the other hand, FDI inflows from Singapore rose to ₹ 1.37 trillion from ₹1.18 trillion during the previous fiscal while FDI from the UAE rose to ₹26,315 crore, up from ₹7,699 crore during FY22. However, total FDI inflows into India declined by 16% to ₹ 3.67 trillion during FY23, as compared to ₹ 4.37 trillion in FY22. Economists said the Indian decline was part of a global FDI slow-down due to slower growth across countries.
“India is not an anomaly. FDI comes in batches. I am not too worried on the FDI front, as some of the things will materialise even though a lot is happening globally," said D.K.
Joshi, chief economist at CRISIL. “But, India is better positioned for growth, as compared to many other countries. So, we will get growth and continue to attract FDI," Joshi added.
Some experts said a large chunk of inflows from tax havens like Mauritius, Cyprus, Caymen Island and Singapore were actually investments rerouted through these countries by investors sitting elsewhere. “It is often difficult to pinpoint where the actual investment is coming from," said a senior market expert, who didn’t want to be named. Rules and regulations set by the government in August 2022, aim to curb such practices.
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