NEW DELHI/CHENNAI: Foreign direct investment (FDI) touched a new peak, clocking $51 billion — the highest ever received in a year.
Data from the Department of Industrial Policy and Promotion (DIPP) showed that FDI rose nearly 15% over the previous year to reach $51 billion during April-February, 2016. A year before, foreign investment stood at $44.29 billion.
“We have had a record inflows of FDI in this country, more than $51 billion from April to February (2015-16) and that is the highest ever,” said Ramesh Abhishek, Secretary, DIPP.
He attributed the reason to creation of healthy business climate and inching higher on the ease of doing business metric.
Interestingly, FDI intelligence, a division of The Financial Times recently noted that India, for the first time pipped China to take the pole position in FDI across the world. “In 2015, India was for the first time the leading country in the world for FDI, overtaking the US (which had $59.6 bn of greenfield FDI) and China ($56.6 bn),” the report noted.
According to Abhishek, complex procedures and delays that have been the bane of our system for the past several decades, were now under the mend. “Enormous efforts are being made to make sure that common citizen and business both have an easy time,” he said.
However, the growth in FDI doesn’t seem to impress economists. “Net FDI rose 60% YoY to a record $37 billion in 2015, with gross inflows up by a third from the year before. Regrettably, these flows were not geared towards boosting the domestic capex cycle or manufacturing activities. Services attracted the most inflows in 2015, making up nearly half of the total stock. By contrast, the manufacturing sector’s share has slowed to a fifth and that of infrastructure to near 5% of the total flows,” said Radhika Rao, India Economist, DBS Bank.