InvestorQ : Is it true that FDI or foreign direct investments picked up in the year 2020?
vidhya Laxmi made post

Is it true that FDI or foreign direct investments picked up in the year 2020?

sarah Leo answered.
2 months ago

Foreign direct investments or FDI equity inflows into India grew by 21% on a YOY basis to $35.33 billion in the first 7 months of the fiscal ending in October 2020. This compares very favourably with the FDI inflow of $29.31 billion reported by the DPIIIT in the corresponding period last year i.e. April 2019 to October 2019.

This sharp spike in FDI flows during the current year can be largely attributed to the mega private placements of equity done by Reliance Jio and Reliance Retail. The total funds raised by Reliance was close to $27 billion of which two important strategic infusions totalling about $15 billion came from Facebook and was followed by Google in Jio Platforms.

Normally, the actual FDI in any year is the sum of the fresh FDI flows during the year and the earnings on FDI reinvested in the country. If you consider the total FDI, including reinvested earnings, then the figure was actually 10% higher YOY at $46.82 billion, compared to about $42 billion in the corresponding period last year.

Sectors like computer software, computer hardware, services, trading, chemicals and automobiles attracted maximum FDI. However, the real thrust to FDI could come in the coming year from the Atma Nirbhar Bharat scheme where the attempt is to encourage local manufacturers to produce on behalf of global players and export to them.