The hue and cry on rupee’s evaluation against dollar is on one side, but the consistent faith of foreign investors (through FDI) in India has only improved, posing the true picture of how the Indian economy is performing under the current government led by Prime Minister Modi.
In the April-June quarter, the foreign direct investment (FDI) grew by a whooping 23 percent i.e. by USD 12.75 billion according to official data.
The foreign fund inflows in April-June 2017-18 stood at USD 10.4 billion, according to the Department of Industrial Policy and Promotion data.
Key sectors that received maximum foreign investment during the first quarter of the fiscal include services (USD 2.43 billion), trading (USD 1.62 billion), telecommunications (USD 1.59 billion), computer software and hardware (USD 1.4 billion), and power (USD 969 million).
Singapore tops the list
Singapore was the single largest source of FDI. A case of improving relations between the two countries.
FDI flow from Singapore was USD 6.52 billion, followed by Mauritius (USD 1.5 billion).
Close third was Japan with USD 874 million and then Netherlands with USD 836 million.
United Kingdom and the US invested USD 648 million and USD 348 million respectively.
A growth in foreign investment assumes significance against the backdrop of widening current account deficit and trade deficit.
The country’s current account deficit (CAD) is likely to touch 2.8 percent of GDP in 2018-19 on the surge in crude oil prices, a report by SBI Research projected.
FPI and FDI inflows are expected to finance a major part of the CAD, the report noted.
FDI had increased at a five-year low growth of 3 percent at USD 44.85 billion in 2017-18. A UNCTAD report, too, had stated that the foreign direct investment in India decreased to USD 40 billion in 2017 from USD 44 billion in 2016 fiscal.