Foreign direct investment (FDI) inflows to India have scaled a record high, reports fe Bureau in New Delhi. Total FDI inflows touched a new peak of $51.64 billion in the first 11 months of 2015-16, compared with the previous high of $46.56 billion in all of the 2011-12 fiscal and $44.29 in the whole of 2014-15, according to the latest data from the Reserve Bank of India.
The surge in FDI inflows comes at an opportune time for the country, which is yet to see a meaningful pick-up in domestic investments, especially by the private sector that is battling high indebtedness and excess capacity following a global slowdown.
The trend bears testimony to foreign investors feeling confident that their interests are protected here, Department of Industrial Policy and Promotion (DIPP) secretary Ramesh Abhishek said on Monday.
Computer software and hardware, financial and other services, trading and automobiles witnessed the highest inflows of FDI in equity in 2015-16 (up to December), according to the latest DIPP data. Total FDI includes FDI in equity, reinvested earnings and other capital.
Abhishek’s statement came close on the heels of a report by the data division of the Financial Times, which showed India pipping China to come out as the highest-ranked country in greenfield capital investment, with $63 billion of FDI announced in 2015. China witnessed a 23% drop in capital investment and a 16% fall in FDI projects due to “plateauing economic growth and rising costs”, the report said.
Already, gross fixed capital formation (GFCF) has been estimated at just 31.6% of the country’s GDP in 2015-16, having recorded a decline in each of the years since the new methodology was introduced to calculate national income with 2011-12 as the base year. It dropped from 34.3% in 2011-12 and 32.3% in 2014-15.