FDI inflows record first decline in six years in FY19

29 May 2019

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Foreign direct investment (FDI) in India declined by 1 per cent to $44.37 billion in the 2018-19 financial year, registering the first fall in the last six years, as the wave of foreign fund flows into the telecom, pharma and other sectors subsided, official figures showed.

This is against a record FDI inflow of $44.85 billion in 2017-18, according to the latest data available with the Department for Promotion of Industry and Internal Trade (DPIIT).
Last time it was in 2012-13 
Last time FDI registered a contraction was in 2012-13 when foreign fund inflows declined of 36 per cent to $22.42 billion from $35.12 billion in 2011-12.
Since 2012-13, the inflows had been steadily growing till it reached a record high in 2017-18.
According to the data, FDI inflows in telecommunication, construction development, pharmaceuticals and power sectors declined significantly in 2018-19.
Foreign direct investment in telecommunication dropped to $2.67 billion in 2018-19 from $6.21 billion in 2017-18, while in construction development FDI fell to $213 million from $540 million, in pharmaceuticals to $266 million from $1 billion, and in the power sector to $1.1 billion from $1.62 billion.
Sectors that recorded a growth in FDI include services ($9.15 billion), computer software and hardware ($6.41 billion), trading ($4.46 billion), and automobile ($2.62 billion).
Meanwhile, Singapore has replaced Mauritius as the top source of foreign investment into India in the last fiscal, pumping $16.22 billion into the Indian market while FDI inflows from Mauritius stood at $8 billion in 2018-19
The other major investors in the country include Japan, the Netherlands, the UK, the US, Germany, Cyprus, the UAE and France.
India is heavily dependent on FDI for its huge investments in the coming years to overhaul its infrastructure sector and boost growth.

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