New Delhi:
This week, India achieved a major milestone as one of the top global investment destinations. Latest data shows that FDI in India has crossed the thousand billion dollar mark since the turn of the century, demonstrating how India has been the preferred destination for foreign investors.
The data released by the Department for Promotion of Industry and Internal Trade (DPIIT) shows that the cumulative amount of foreign direct investment, including equity, reinvested profits and other capital, between April 2000 and September 2024 reached US$1,033.40 billion (or 1 trillion dollars).
To get a perspective of how gigantic a trillion dollars really is, let's take this simple example: if a person were to earn one dollar (Rs. 84) per second (i.e. a trillion dollars in trillion seconds) – then it takes the person 11.5 days to make a million dollars. But here's where it gets interesting. If someone continues to earn a dollar per second, it would take 31.7 years to reach the billion dollar mark, and a whopping 31,709 years to reach the trillion dollar mark.
Another thought-provoking way to look at this is that India, the fifth largest global economy, has a total GDP of about $3.89 trillion in 2024. In 2014 this was approximately $2 trillion. Now compare that to the $1 trillion inflow of foreign direct investment over the past twenty years.
SOURCE OF FDI
Where did all this investment come from? Which countries did these investments come from? You might assume that the top spot would be either the US, the world's largest economy, or perhaps China, the world's second largest economy. But it's neither.
The country that contributed the most to FDI in India during this period is Mauritius – as much as 25 percent of all FDI came through this route. Mauritius was closely followed by Singapore with 24 percent. The United States of America came in a distant third with 10 percent.
Other countries that have invested significantly in India include the Netherlands with 7 percent, Japan with 6 percent, Britain with 5 percent, the UAE with 3 percent, and the Cayman Islands, Germany and Cyprus all accounting for 2 percent. each.
SECTORS WHICH ARE SEEING MAJOR INVESTMENTS
The sector in which the highest investments were made was the services and related sectors. Significant investments were made in computer software and hardware, telecommunications, trade, construction, infrastructure development, automobiles, chemicals and pharmaceuticals.
FDI INFLOWS RISING
Of the $1,033 billion, $667.4 billion came in over the past decade between 2014 and 2024, showing a 119 percent increase in investment compared to the previous decade. The data also shows that FDI inflows have been achieved in nearly 60 sectors across 31 states and union territories in India.
To attract more investments in the long term, India has also made its investment policy liberal and lucrative. Reforms have resulted in most sectors, with the exception of sectors of strategic importance; see 100 percent foreign direct investment through the automatic route.
Boosting the 'Make in India' initiative, the manufacturing sector has seen a 69 percent increase in foreign direct investment in the last decade compared to the previous decade.
WHICH SECTORS ARE OPEN AND WHAT IS THE PROCEDURE
In most sectors, foreign direct investment is allowed through the automatic route, while in areas such as telecom, media, pharmaceuticals and insurance, government approval is required for foreign investors.
Under the government approval route, a foreign investor has to obtain prior approval from the concerned ministry or department, while under the automatic route, a foreign investor has to inform the Reserve Bank of India (RBI) only after the investment has been made. .
Currently, foreign direct investments are prohibited in some sectors. They are lotteries, gambling and betting, money funds, Nidhi companies, real estate companies and production of cigars, cheroots, cigarillos and cigarettes using tobacco.
(Input from PTI)
