In the midst of adverse economic conditions, a disappointing news has come to the fore on the FDI front. During the last financial year, there has been a significant decline in Foreign Direct Investment. This information has been revealed in a recent report of the Reserve Bank.
Such a decline in FDI
In an article published in the Reserve Bank’s latest monthly bulletin titled State of the Economy, it has been told that during the financial year ending March 31, 2023, Gross Inward FDI increased by more than 16 percent. has declined. In the financial year 2021-22, this figure of FDI was $ 84.8 billion. It decreased by 16.3 percent to $ 71 billion during the financial year 2022-23.
Reduction in FDI due to these reasons
According to the article, Net FDI has also declined during this period. Net FDI figure was $ 38.6 billion in the financial year 2021-22, which came down to $ 28 billion in the last financial year. According to the data, the sectors where FDI has declined the most include manufacturing, computer services and communication services. During this period, FDI has decreased from America, Switzerland and Mauritius.
growing semiconductor industry
Amidst the decline in the overall figure of FDI, a good news has been given by the Semiconductor Industry. In recent years, both the government and the private sector in India have paid a lot of attention to the semiconductor industry. The government is trying to make the country self-sufficient in this matter and is encouraging private companies. It seems to be beneficial. This has been confirmed in the report. It has been said in the report that huge investment is being made in the chip ie semiconductor projects in the country, which is in favor of the efforts of the Government of India.
India is only behind America
In the case of FDI in the semiconductor industry, India has taken a big leap and has been behind only America last year. India has received foreign direct investment of $26.2 billion in the US semiconductor industry as against $33.8 billion FDI. At the same time, FDI in China’s semiconductor industry has come down to just $0.5 billion.
FPI became pure buyer
On the other hand, the situation has improved on the FPI front. During the month of April, Foreign Portfolio Investors made net purchases in the domestic market. They infused $1.9 billion in equity and $0.2 billion in debt on a net basis. Sectors like financial services, capital goods, oil and gas are ahead in bringing FPI. The trend of April seems to be gaining more momentum in May. FPIs have made net purchases of $2.2 billion during the month of May till 15th.
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