A census conducted by the Reserve Bank of India has revealed that the United States was the largest source of foreign direct investment (FDI) in India in FY23. It was followed by Mauritius, the United Kingdom and Singapore, which collectively accounted for 60 per cent of the inward FDI in the country. The FDI in terms of market value amounted to Rs 50 lakh crore in FY23.
As per the RBI data, the US brought in Rs 8.58 lakh crore ($103 billion) FDI in FY23 as against Rs 8.05 lakh crore in the previous fiscal. This was about 17.2 per cent of the share.
FDI from Mauritius was Rs 7.43 lakh crore (Rs 7.79 lakh crore in FY22) accounting for a share of 14.9 per cent and the UK Rs 7.08 lakh crore (Rs 5.83 lakh crore in FY22).
The census data was based on foreign liabilities and assets (FLA) covering cross-border liabilities and assets of the entities (companies, limited liability partnerships, alternative investment funds and partnership firms) with inward/outward direct investment (DI).
Of the 38,689 entities, which responded in the latest census round, 33,850 reported FDI and ODI in their balance sheet as at end-March 2023, the RBI census stated.
“Over 97 per cent of the responding DI entities were unlisted in March 2023 and they accounted for a bulk of the FDI equity capital in India,” according to the RBI report.
Outward direct investment
In the case of outward direct investment (ODI), Singapore, the United States, the United Kingdom and the Netherlands were among the top four destinations, which accounted for 60 per cent of the Rs 9.1 lakh crore invested by Indian entities.
Total outward direct investment by Indian firms rose by 19.46 per cent to Rs 9.11 lakh crore ($ 109 billion) in FY2023 as against Rs 7.62 lakh crore last year, data from RBI study showed.
Singapore was the largest beneficiary of outward direct investment (ODI) by Indian firms with the country getting Rs 2.03 lakh crore ($ 24.48 billion), which is about 22.3 per cent of the total ODI during the financial year 2023.
The US received Rs 1.24 lakh crore (13.6 per cent share) and the UK got Rs 1.16 lakh crore (12.8 per cent) as ODI from India in FY2023.
The top ten countries accounted for as much as 85 per cent of the ODI. Switzerland received Rs 28,228 crore ($3.40 billion).
The census further highlighted that the market value of FDI in India increased by 6.9 per cent in rupee terms in FY23, primarily due to the rise in FDI in unlisted companies, the findings of the RBI census showed.
In terms of market value, ODI growth outpaced the growth in FDI and, as a result, the ratio of inward to outward direct investment stood at 5.5 times in March 2023 as compared with 6.1 times a year ago and 5.6 times two years ago.
Sector-wise, the manufacturing sector continued to attract the largest share of FDI equity, both at market value as well as at face value. Among services, ‘Information & Communication’ and ‘financial & insurance activities’ were the major FDI recipient sectors.
Non-financial companies retained the lion’s share of the FDI equity at face value. The market value of FDI in unlisted firms surpassed that in listed companies.
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