Government Reports Highest Ever FDI Collections At $35.73 Billion Between April-August 2020


Government reports highest ever FDI in April-August FY21 period

In the time period of April to August 2020, India has received the highest ever the number of total Foreign Direct Investment (FDI) for the first five months of a financial year, according to a statement released by the commerce and industry ministry on Tuesday. The ministry also said that this is a result of FDI policy reforms, investment facilitation, and ease of doing business.

The total FDI was calculated to be around $ 35.73 billion, collected in just the first five months. The amount stands 13 percent higher than the last fiscal figure taken around the same time.

The ministry has said, “FDI equity inflow received during FY21 (April to August 2020) is $27.1 billion. It is also the highest ever for the first five months of a financial year.”

The inflow of FDI is 16 percent higher than that in the first five months of 2019-20. The inflow of FDI in the first five months of 2019-20 stood at $ 23.35 billion.

The government has said, “Measures taken by the government on the fronts of FDI policy reforms, investment facilitation and ease of doing business have resulted in increased FDI inflows into the country.” They also added that these trends show that India has made its name as a preferred investment destination amongst global investors.

In the first quarter of 2020-21, the total investment in India dipped by 60 percent from a year-ago period. The amount was calculated for this quarter to be around $ 6.5 billion, according to data released by the department for the promotion of industry and internal trade (DPIIT). The department for the promotion of industry and internal trade (DPIIT) showed the data last month. India had a worse performance than it was predicted by the United Nations Conference on Trade and Development (UNCTAD).

Later in March, the agency had again revised its projections about the impact of the outbreak and spread of Covid-19 on global FDI. According to their prediction, the multilateral agency expects the downward pressure on global FDI to be around -30 percent to -40 percent in FY21 which is much higher than its earlier projection of -5 percent to -15 percent pressure.

The government also tends to make FDI policy more investor-friendly to make sure that the country sees better cash inflow. They also are trying to remove bottlenecks that have been hindering the investment inflows into the country.

It said, “The steps taken in this direction during the last six years have borne fruit as is evident from the ever-increasing volumes of FDI inflows being received into the country.”

According to the stats released by the government, total FDI inflow grew 55 percent from $ 231.37 billion in 2008-14 to $ 358.29 billion in 2014-20. For the same period, FDI equity inflows rose 57 percent from $ 160.46 billion to $ 252.42 billion.

Investments into Jio Platforms, Reliance Industries’ telecom subsidiary, from global investors like Google, that bet $4.5 billion on the venture in July had boosted the FDI.

Vikram Doshi, partner (tax and regulatory issues) at PwC said to The Hindu, “There has been a lot of quiet private equity investments taking place in the real estate sector, which are expected to continue. Moreover, several existing foreign investors have realized the need to ramp up local supply chains after the pandemic hit.”