Communication, Trade And Financial Services Attracting Foreign Investors To India

India's digital drive, riding on communication, IT and financial services has caught fancy of foreign investors, as reflected in over USD 20 billion Foreign Direct Investment (FDI) flowing in these sectors alone in the fiscal, 2017-18, claims an ASSOCHAM analysis. With emergence of aggressive online market dominated by some of the strong home-grown entrepreneurs and overseas giants like Amazon and Walmart along with global private equity and venture funds, the entire pack of communication services, retail and wholesale trade, financial and computer services has emerged as one of the sought after areas of interest for foreign investors, as suggested by the RBI data.

Against USD 5.87 billion in 2016-17, the FDI flows into the communications services alone amounted to USD 8.80 billion in the fiscal 2017-18. Likewise, the FDI inflows catapulted from USD 2.77 billion to USD 4.47 billion in the retail and wholesale trade in these years. The financial services saw the inflows jump from USD 3.73 billion to USD 4.07 billion and computer services from USD 1.93 billion to USD 3.17 billion.

The fact that these sectors have accounted for more than 50 per cent of the total FDI of USD 37.36 billion in 2017-18 reflects the kind of global interest being generated into the new areas of economy, including online marketplace, financial technologies or Fintechs. With a fast pace of financialisation of the Indian economy, investment in the technology driven trade in goods and services would only increase, both from the overseas and domestic services. Besides, a lot more new entrepreneurship is coming up in the new economy which is set to encompass more areas of traditional sectors, said ASSOCHAM.

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