During the first half of the current fiscal, foreign inflows into India grew by 15 per cent to USD 30 billion. The country attracted USD 17.5 billion worth of foreign investments in August. While these numbers show that the investment is rising even during the pandemic, it has not reached its true potential (moreover, just one company accounts for a bulk of this investment). To understand what is holding investors from investing in India and to understand what policies India has adopted to attract investments, Free Press Journal and SIES in association with Invest India are organising a panel discussion titled ‘Financing India-How to galvanize investments into India’ on Thursday, 3 December 2020, from 3:00 onwards.
The panellists for the session (in alphabetic order) are Vivek Sonny Abraham, Vice President, Invest India; Sai Sudha Chandrasekaran, Senior AVP, Invest India; and Madan Sabnavis, Chief Economist, CARE Ratings ltd.
According to Commerce and Industry Ministry data, Singapore continues to be the top source of foreign direct investment (FDI) for India. In April-September 2020-21, USD 8.30 billion foreign inflows came from Singapore to India.
The second biggest source of FDI into India is the United States. This position was held by Mauritius until recently.
During April-September 2020, India attracted FDI worth USD 7.12 billion from the US and USD 2 billion from Mauritius.
India needs infrastructure-led investment at this point in time to support its growth story. According to the Care Ratings report, investments announced for new projects have been falling for the past five years for the period April – September with the exception of H1 FY19 where it rose by 29 per cent y-o-y to Rs 7.7 lakh crore from Rs 6 lakh crore in H1 FY18. In addition, new projects announced for H1 FY21 fell sharply by 69 per cent to Rs 1.5 lakh crore compared with Rs 4.8 lakh crore last year. This sharp fall was as expected due to decline in economic activity during the pandemic.
In July, even Union minister Nitin Gadkari admitted that India needs FDI worth Rs 50 to 60 lakh crore. These investments will mainly be utilised by infrastructure projects as well as MSME sector to accelerate the COVID-19-hit economy.