Foreign invesments in India slow down to a decade's low

Foreign invesments in India slow down to a decade's low

Foreign investments, which include both foreign direct investment and the foreign portfolio investments, have shrunk to a decade's low even as the Indian economy remains in dire need of investments

Weak investments growth and sluggish demand are crippling the country's economic growth and despite government's effort to revive it, headwinds to foreign investment flows into India are expected to continue over sometime.

At a decade's low

  • Foreign Investment to GDP ratio at 1.1% in 2018/19, lowest over a decade.
  • The ratio touched its low at 0.7% in the year 2008/09.
  • Foreign investments include both foreign direct investment in India and abroad and the foreign portfolio investments in the country and abroad.
Dwindling total foreign investments

  • Total Foreign investment inflows stood at $30,095 million last year.
  • It declined massively by 43% in 2018/19 after a growth of 21.2 % and 35.5% in the previous two years.
FDI: A free fall

  • FDI equity inflows fell at 1.1% in 2018/19.
  • It declined for the first time in six years.
  • In the current fiscal, $16,330 million FDI equity flows has been registered till June 2019.
  • Efforts have been made by the government to put growth back on track  by liberalising foreign direct investment rules in many sectors but foreign investors take a back seat as economic revival looms.
FPI: The massive exodus

  • FPIs continue on their selling spree, offloading stocks worth Rs 32, 439 crore between July 2019 till September 16--- the maximum quarterly exodus since 2000.
  • This reflux was triggered by the imposition of an additional surcharge on the super-rich.
  • Its withdrawal however, doesn't seem to have convinced them yet.

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