India FDI decline – Bharat Pulse News

India’s foreign direct investment (FDI) declined by 5.6% year-on-year, totaling $10.9 billion in the October-December quarter of the 2024-25 fiscal year. This dip follows a period of strong growth in previous quarters but reflects the impact of global economic uncertainties on investor sentiment. FDI Trends in Recent Quarters Despite the quarterly drop, India’s FDI inflows had shown a strong performance earlier in the fiscal year. In the April-June 2024 quarter, FDI surged by 47.8% to $16.17 billion, while the July-September quarter recorded a 43% rise, reaching $13.6 billion. However, the October-December quarter reversed this trend, with inflows falling to $10.9 billion from $11.55 billion in the same period the previous year. Overall FDI Growth Remains Positive Even with the quarterly decline, cumulative FDI inflows for April-December 2024-25 increased by 27%, reaching $40.67 billion, compared to $32 billion in the same period of the previous fiscal year. Total FDI, which includes equity inflows, reinvested earnings, and other capital, also rose by 21.3%, amounting to $62.48 billion in the first nine months of 2024-25, up from $51.5 billion in the corresponding period last year. Key FDI Sources and Sectoral Performance Several countries contributed significantly to India’s FDI inflows during April-December 2024-25: Singapore: Investments surged to $12 billion from $7.44 billion. United States: FDI increased to $3.73 billion from $2.83 billion. Netherlands: Investments rose to $4 billion from $2.27 billion. UAE: FDI climbed to $4.14 billion from $2.43 billion. Cyprus: FDI grew to $1.18 billion from $796 million. Conversely, FDI from Mauritius, Japan, the UK, and Germany saw declines during this period. Among the top-performing sectors: Services attracted $7.22 billion, up from $5.18 billion. Computer software and hardware remained a strong sector for FDI. Trading, telecommunications, automobiles, and chemicals also saw increased inflows. Non-conventional energy investments reached $3.5 billion. Impact of Global Economic Uncertainty The decline in FDI during the October-December quarter is largely attributed to global economic uncertainty. Factors such as slowing global growth, trade tensions, and geopolitical risks have led to investor caution, affecting capital flows into emerging markets like India. Government Initiatives to Boost Investment To counter the slowdown and attract more foreign investment, the Indian government has introduced several initiatives: Policy Reforms: Easing regulatory requirements and simplifying compliance. Incentives: Offering tax benefits and subsidies to attract investors. Infrastructure Development: Strengthening industrial and business ecosystems. These measures aim to mitigate external risks and sustain investment momentum in the country. Outlook for FDI in India While the October-December quarter saw a drop in FDI inflows, India’s overall investment trajectory remains positive. The government’s continued efforts to enhance ease of doing business and improve investor confidence are expected to drive FDI growth in the coming months.

India’s FDI Falls 5.6% to $10.9 Billion in Oct-Dec 2024

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