The United States emerged as the leading source of foreign direct investment (FDI) in India during the fiscal year 2023 (FY23), according to a recent census conducted by the Reserve Bank of India (RBI).
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The data also revealed that Mauritius, the United Kingdom, and Singapore followed the United States and collectively contributed 60 per cent of the total FDI inflow into India.
In terms of market value, the FDI amounted to Rs 50 lakh crore in FY23.
Specifically, the United States brought in Rs 8.58 lakh crore ($103 billion) in FDI during FY23, up from Rs 8.05 lakh crore in the previous fiscal year, representing a 17.2 per cent share of the total FDI.
Meanwhile, FDI from Mauritius stood at Rs 7.43 lakh crore (compared to Rs 7.79 lakh crore in FY22), accounting for a 14.9 per cent share, while the United Kingdom contributed Rs 7.08 lakh crore (compared to Rs 5.83 lakh crore in FY22).
This census relied on foreign liabilities and assets (FLA) data, which encompassed cross-border assets and liabilities of various entities such as companies, limited liability partnerships, alternative investment funds, and partnership firms engaged in inward and outward direct investment (DI).
Out of the 38,689 entities surveyed, 33,850 reported their FDI and ODI on their balance sheets as of the end of March 2023.
Notably, over 97 per cent of these responding DI entities were unlisted as of March 2023 and accounted for a significant portion of the FDI equity capital in India, according to the RBI report.
Regarding outward direct investment (ODI) by Indian entities, Singapore, the United States, the United Kingdom, and the Netherlands were among the top destinations, receiving 60 per cent of the total Rs 9.1 lakh crore invested during FY23.
The total ODI by Indian firms increased by 19.46 per cent to Rs 9.11 lakh crore ($109 billion) in FY23 compared to Rs 7.62 lakh crore in the previous year, according to the RBI study.
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Singapore was the largest recipient of ODI from Indian firms, receiving Rs 2.03 lakh crore ($24.48 billion), accounting for around 22.3 per cent of the total ODI during FY23.
The United States received Rs 1.24 lakh crore (13.6 per cent share), and the United Kingdom received Rs 1.16 lakh crore (12.8 per cent share) from India in terms of ODI during the same fiscal year.
The census also highlighted that the market value of FDI in India increased by 6.9 per cent in rupee terms during FY23, primarily due to the rise in FDI in unlisted companies.
In terms of market value, the growth of ODI outpaced that of FDI, resulting in the ratio of inward to outward direct investment decreasing from 6.1 times to 5.5 times in March 2023 compared to the previous year and 5.6 times two years prior.
Sector-wise, the manufacturing sector continued to attract the largest share of FDI equity, both in terms of market value and face value.
Among services, the “Information and Communication” and “financial and insurance activities” sectors were the major recipients of FDI.
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Non-financial companies retained the majority of the FDI equity at face value, with the market value of FDI in unlisted firms surpassing that in listed companies.
