NEW DELHI: The net foreign direct investment (FDI) inflows in the current financial year rose from $10.4 billion in the first half of FY24 to $14.3 billion in the same period of FY25, a year-on-year increase of 37.6%, as per a finance ministry report.
Significant contributions came from sectors such as manufacturing, financial services, electricity and energy, and communication services, which collectively made up nearly two-thirds of the gross FDI inflows. Singapore, Mauritius, the Netherlands, the UAE, and the US were sources for about three-fourths of the flows.
“Though cumulative net FDI inflows in H1 of FY25 were greater than those in the same period of the previous year, there was an outflow of net FDI in September 2024 due to a significant increase in repatriation and disinvestment, which exceeded the gross FDI inflows during that month,” the report said.
Meanwhile, the report cited heightened geopolitical tensions and recent developments in China for the withdrawal of significant funds from Indian equities. After seeing net inflows for five consecutive months, foreign portfolio investors became net sellers in October, it stated.
During FY25, rupee was recognised as one of the most stable currencies, remaining within a narrow range of 84.3 to 84 per dollar from April to October 2024, it said. This stability was reflected in its low coefficient of variance, recorded at 0.28%, it added.
The labour market is showing signs of growth as evidenced by high-frequency indicators such as net payroll additions under the Employee Provident Fund Organisation, the employment sub-index of the Purchasing Managers’ Index, and the Naukri JobSpeak index, all highlighting a rise in formal employment and hiring, according to the report.
“Results from the Annual Survey of Industries 2022-23 show robust growth in the manufacturing sector, with over 22 lakh jobs added compared to 2018-19, underscoring the sector’s strong post-pandemic recovery,” it stated.