In a noteworthy turn of events, India has experienced an extraordinary 64 per cent surge in Foreign Direct Investment (FDI) during October, reaching an impressive $8.4 billion — the highest figure recorded in the past 18 months, as reported by The Times Of India.
This surge, amid global economic uncertainties, marks a significant deviation from prevailing trends as inflation moderates, and central banks take a pause on interest rate hikes.
The latest data from the Reserve Bank of India (RBI) indicates that foreign investment has been going up for three months straight on a gross basis.
However, when we look at the bigger picture, the total foreign investment from April to October 2023 is a bit lower — 6.7 per cent less — at $41.5 billion compared to $44.5 billion last year.
Despite this dip, the Indian government is actively trying to attract more investors. It wants India to be a top choice for companies looking to set up outside of China.
India is also making efforts to bring in big companies like Apple and Tesla by offering incentives and schemes to both local and global investors.
The surge in foreign investment in October follows a 20 per cent increase in September, making it the first time since May 2022 that foreign investment exceeded $8 billion.
Breaking down the foreign investment, a large part came from a $3.6 billion purchase of shares.
Investments through the RBI route were around $2.5 billion, and reinvested earnings stayed steady at $1.7 billion.
In October, there was also a $1.1 billion pullback or disinvestment, much less than the $2.9 billion from a year ago.
Earlier this month, the United Nations Economic and Social Commission for Asia and the Pacific named India the highest receiver of foreign investment for the second year in a row, totaling $68 billion — though 4 per cent less than in 2022.
The report highlighted some big deals in various sectors, including communications, semiconductors, automotive OEM, software, and biomass power.
Another recent report by the Organisation for Economic Co-operation and Development showed that global foreign investment bounced back to $727 billion in the first half of 2023.
However, this is still 30 per cent less than what we saw in the first half of 2022, the report said.
The report pointed out that the US, India, Mauritania, the UK, and Brazil benefited the most from significant projects.
Nayan Dwivedi is Staff Writer at Swarajya.
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