FDI inflows expected to rebound in India: survey

The monetary tightening at the global level has further restricted the FDI equity inflows, the survey said

Foreign direct investment into the country is expected to rebound in the coming months on account of India’s high economic growth, and steps to further improve the business environment of India, the Economic Survey said on January 31.

The rise in global uncertainty in the wake of the Russia-Ukraine conflict, FDI equity inflows in the manufacturing sector in the first half of the current fiscal (April-September) fell below its corresponding level in the first half of 2021-22, the document, which was tabled in Parliament, said.

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The monetary tightening at the global level has further restricted the FDI equity inflows, the survey said.

“A rebound in FDI inflows is, however, expected as the Indian economy sustains its high growth while monetary tightening the world over eventually eases with the weakening of inflationary pressures,” the survey said.

FDI equity inflows into India contracted by 14% to $26.9 billion during the April-September this fiscal, according to the data of the Department for Promotion of Industry and Internal Trade (DPIIT).

Total FDI inflows, which include equity inflows, re-invested earnings and other capital, declined to $39 billion during the first six months of the current fiscal year as against $42.86 billion in the year-ago period.