India’s Foreign Direct Investment (FDI) equity inflows declined for the first time in six years
in 2018-19. Data released by the Department of Industrial Policy and
Promotion and internal trade
showed FDI equity inflows into Indiadeclined 1% to $44.4 billion in the year to 31 March. The decline signals a squeeze
in long-term foreign
investment into the country.
The two sectors where FDI inflows dropped the
most are telecommunications (fell 57% to $2.7 billion) and pharmaceuticals
(dropped 74% to $266 million). Singapore dislodged Mauritius as a top source of
FDI, accounting for $16.22 billion inflows.
What is Foreign Direct
Investment (FDI)?
Foreign direct investment (FDI) is an investment
made by a firm or individual in one country into business interests located in another country.
Generally, FDI takes place when an investor establishes foreign
business operations or acquires foreign business assets, including
establishing ownership or controlling interest in a foreign company.
Foreign direct investments are distinguished from portfolio
investments in which an investor merely purchases equities of foreign-based
companies.
