he ministry of commerce attracted the highest ever foreign direct investments (FDI) into the country, amounting to $81.72 billion during the financial year 2020-21. It is 10 percent higher as compared to the financial year 2019-20, when inflows touched $74.39 billion. This happened on account of stern measures taken by the government on the fronts of investment facilitation, policy reforms and ease of doing business.
The government statement stated that “Measures taken by the government on the fronts of foreign direct investment (FDI) policy reforms, investment facilitation and ease of doing business have resulted in increased FDI inflows into the country,”.
Additionally, the government maintained that in the Financial year 2020-21, the FDI equity inflow grew by 19 per cent to $59.64 billion. Compared to the previous year, the inflows have gone up from $49.98 billion.
According to reports, for the financial year 2020-21, the top investor countries included Singapore investing up to 29 percent, the USA up to 23 percent and Mauritius (9 percent). Reportedly, out of top 10 countries, Saudi Arabia was the top investor in terms of percentage increase during F.Y. 2020-21 from the previous year. It invested around US$ 2816.08 million in comparison to US$ 89.93 million reported in the previous financial year.
Compared to financial year 2019-20, 227% and 44% increase was recorded in FDI equity inflow from the USA & the UK respectively, during the F.Y. 2020-21.
The top sector attracting the most investment was the ‘Computer software and hardware’ with around 44 percent share of the total FDI equity inflow. This was followed by the construction and infrastructure activities (about 13 per cent) and services sector (8 per cent) respectively. Other major sectors, were namely Construction (Infrastructure) Activities, Computer Software & Hardware, Rubber Goods, Retail Trading, Drugs & Pharmaceuticals and Electrical Equipment which have recorded more than 100% jump in equity during the F.Y. 2020-21 as compared to the previous year.
In terms of investments in state, Gujarat was reportedly the top recipient state during the F.Y. 2020-21. According to reports, there was 37% share of the total FDI Equity inflows in Gujarat followed by Maharashtra ( up to 27%) and Karnataka (13%).
Government stated that “Gujarat is the top recipient state during 2020-21 with 37 per cent share of the total FDI equity inflows, followed by Maharashtra (27 per cent) and Karnataka (13 per cent),”