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Department of Industrial Policy and Promotion (“DIPP”)-November 2013
11
Reserve Bank of India
12
Department of Industrial Policy and Promotion
13
Central Statistics Offce (CSO)
Source: DIPP - March 2014
Cumulative FDI Equity Inyows (USD billion)
% of Total FDI Equity Cashyows
Mauritius
Japan
Netherlands
Singapore
U.S.A. Cyprus
Germany
U.K.
FranceU.A.E.
FDI Equity Inyows (USD billion)
90
80
70
60
50
40
30
20
10
0
35%
12% 10% 8%
5% 5% 3% 3% 2% 1%
2 Investment Climate
The decade (2004-13) gone by would be considered
as a golden era for FDI in India. As per Department of
Industrial Policy and Promotion (“DIPP”), between years
2000-13, India attracted cumulative FDI infow of USD
326 billion (INR 15.57 trillion)10 and this represented
a growth rate of 18.4% on a Compound Annual
Growth Rate (“CAGR”) basis. Almost 67% of FDI was
constituted of equity infows while the rest was through
re-invested earnings capital. In FY13/14, FDI infows
stood at USD 24.3 billion (INR 1,409 billion) as compared
to FDI infows of USD 22.4 billion (INR 1,219 billion)
during FY12/13.
Post the liberalization impetus of the 1990s, India’s
reserves swelled from a meagre USD 5.8 billion (March
199111) to a comfortable USD 292.24 billion (INR 18.16
trillion) (January 2014). However there is still considerable
scope to expand FDI.
According to DIPP, the highest FDI infow in India
includes investors from Mauritius, Singapore, United
Kingdom, Japan, United States of America, Netherlands,
Cyprus, Germany, France and United Arab Emirates.
These top 10 countries almost account for 85% total
country’s cumulative FDI equity infows of USD 217.7
billion (INR 10.44 trillion) 12. Mauritius, Singapore and U.K.
were the top investing countries in India accounting for
35%, 12%, and 10%, respectively in the cumulative total
FDI infows since April 2000-March 2014.
*Figures are up to March 2014
Source: Department of Industrial Policy and Promotion (DIPP)
% of Total FDI Cashyows
FY00/01FY01/02FY02/03FY03/04FY04/05FY05/06FY06/07FY07/08FY08/09FY09/10FY10/11FY11/12FY12/13FY13/14
FDI Equity Inyows (USD billion)
40
35
30
25
20
15
10
5
0
61%
66%
54%
51% 53%
62%
55%
71% 75%
68%
61%
75%
67%
61%
FDI Equity Inyows (USD billion)
According to data from DIPP, the top 10 sectors that
received large FDI infows include services, construction,
telecommunications, computer software & hardware,
drugs & pharmaceuticals, chemicals, automobiles, power,
metallurgical industries and hotels & tourism. These
sectors accounted for 67% total country’s cumulative
FDI equity infows. Service sector comprising businesses
of fnancial, banking, insurance, non-fnancial/banking,
outsourcing, R&D, courier and technology testing &
analysis contributed almost 50%13 of the India’s total
GDP in last 10 years accounted for the highest FDI with
cumulative infows of USD 39.46 billion (INR 1.86 trillion)
from April 2000 to March 2014 accounting for 18% share
of the total infow. Construction development comprising
townships, housing and built up infrastructure accounted
for cumulative equity FDI infows to the tune of USD 23.31
billion (INR 1.09 trillion) from April 2000 to March 2014.
Telecommunications and computer hardware & software
sectors ranked 3rd and 4th with the total cumulative FDI
equity infow of USD 14.16 billion (INR 667 billion) and
USD 12.82 billion (INR 597 billion) respectively in the
aforementioned period. Drugs and pharmaceuticals sector
attracted FDI infow of USD 11.6 billion (INR 561 billion)
while Automobile sector attracted an FDI infow of 9.81
billion (INR 482 billion). Chemical (other than fertilizer),
power, metallurgical industries and hotel & tourism
attracted an FDI infow of USD 9.67 billion (INR 452 billion),
USD 8.9 billion (INR 427 billion), USD 8.01 billion (INR 383
billion) and USD 7.12 billion (INR 362 billion) respectively
from April 2000 to March 2014.