India’s FDI equity inflows declined for the first time in 6 years

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.