 "Net FDI into India touches 21-month high at $5.9 billion in October")
The net foreign direct investment (FDI) into the country at $5.9 billion rose to a 21-month high in October 2023, primarily due to strong gross inflows and lower repatriation. Sequentially, net FDI rose from $1.54 billion in September 2023 and $1.16 billion in October 20222, according to Reserve Bank of India data.
The repatriation, money taken out from the direct investments made in India, declined to $1.10 billion in October 2023 from $3.43 billion in September 2023 and $2.93 billion in October 2022.
The major source countries were Mauritius, Singapore, Cyprus and Japan, contributing more than four-fifths of the total FDI inflows in October 2023. Around four-fifths of the gross inward FDI equity flows were received in manufacturing, retail and wholesale trade, electricity and other energy sector, and financial services sector.
“Amidst global de-risking efforts, emerging economies like India remain attractive investment destinations,” according to the ‘State of Economy’ article in RBI’s monthly bulletin for November 2023.
However, cumulatively net FDI in April-October 2023 nosedived by half to $10.43 billion from $20.76 billion in April-October 2022, RBI data showed.
A slowdown in economic and business activities worldwide has impacted direct investment flows, both inbound and outbound. Most investments (outward FDI) are in subsidiaries or stakes in foreign companies. A slowdown in the developed markets means fewer opportunities, according to bankers.
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India’s outward FDI commitments fell by 19.6 per cent sequentially to $1.55 billion in November 2023, compared to over $ 1.93 billion in October 2023. They halved compared to $3.67 billion in November 2022. Outbound FDI, expressed as a financial commitment, comprises three components: equity, loans, and guarantees.
The equity commitments declined to $729.57 million in November 2023 from $870.37 million in October 2023. It was significantly lower than the $1.69 billion recorded in November 2022. The debt commitments decreased to $184.96 million in November, down from $250.42 million in October, also lower compared to $300.58 million in November 2022. Guarantees for overseas units declined to $637.26 million in November from $809.26 million in October. They were down substantially compared to $1.68 billion a year ago, the data showed.