 "investors, investment, funds, FPI, FDI")
Despite an overall decline in foreign direct investment (FDI) into India, there are promising signs as the country may garner interest in greenfield investments, especially in light of China's first-ever quarterly FDI deficit, according to a report by the Economic Times (ET).
According to the United Nations Conference on Trade and Development (UNCTAD), India ranks among the top three in greenfield FDI announcements. This suggests that India is attracting fresh global investments.
Net FDI in India declined during the April-August period to $2.99 billion from $18.03 billion during the same period last year. The Reserve Bank of India's data from the October 2023 bulletin stated that FDI in India was $7.28 billion this year, compared to $22.79 billion during the same period in 2022.
The ET report highlighted that policymakers expect these developments to increase investment flows by 2024. This optimism also stems from India's efforts to create an FDI-friendly environment as countries worldwide seek to diversify away from excessive reliance on China. The move also aligns with India's ongoing efforts to integrate itself into international manufacturing and trade networks.
As reported by Business Standard earlier, Financial Services Secretary Vivek Joshi also recently announced that India is becoming a favoured destination for FDI in the infrastructure sector as the government has taken many supportive measures. Prime Minister Narendra Modi also announced last week that India's sunrise food processing sector alone has attracted Rs 50,000 crore FDI in the last nine years, seeing almost a 150 per cent growth in exports of processed food.
In October, the Department for Promotion of Industry and Internal Trade (DPIIT) Secretary Rajesh Kumar Singh stated the government may liberalise FDI norms for the country's space sector. He added that FDI liberalisation has substantially been achieved in India except for a few strategic sectors, showing India's commitment to become an integral part of global supply chains.
According to ET, China's recent negative FDI flows in the July-September period also reflect structural issues its economy faces, including demographic challenges, financial sector difficulties, and real estate sector problems. India can capitalise on these issues as investors look for alternatives.
