Foreign Investment Inflows
Foreign Investment Inflow refers to the movement of funds into the domestic economy from abroad, representing either the purchase of domestic financial securities and physical assets by foreigners, or the borrowing of foreign funds by domestic residents.
Foreign Investment Inflow refers to the movement of funds into the domestic economy from abroad, representing either the purchase of domestic financial securities and physical assets by foreigners, or the borrowing of foreign funds by domestic residents.
SUBJECT Variables
FDI INTO INDIA
FDI inflow is the total value of inward overseas direct investment made by foreign entities, including non-resident investors. It is therefore, investment coming into the country.
- Total FDI inflow into India touched a high of USD 82 billion in 2020-21, an increase of 10.2% over the preceding year. India's total FDI inflow has more than doubled, increasing by 127% between 2013-14 and 2020-21.
- 73% of the total investments made by foreign investors in 2020-21 was in equities. While the value of investments in equities increased by USD 9.6 billion in 2020-21, its share of total FDI too increased by 6% signifying investors preferred equities as a safer instrument/avenue for their investments.
- 20.7% of the total FDI inflow in 2020-21 was in the form of re-invested earnings wherein the income generated by investors on their existing investments was invested back into India. The value of re-invested earnings has consistently risen since 2013-14, up from USD 9 billion in 2013-14 to USD 16.9 billion in 2020-21.
- 4.8% of the total investments made by foreign investors in 2020-21 was in other capital forms
- Only 1.8% (USD 1.45 billion) of the total FDI inflows in 2020-21 were in ECUB (equity capital of unincorporated bodies), in comparison to 2.4% (USD 1.75 billion) in 2019-20.
FDI outflow is the total value of outward overseas direct investment made by the residents of the country to businesses based in foreign economies.
- The total outflow by Indians in 2020-21 was USD 27 billion, a 47% increase from USD 18.4 billion in 2019-20. Of this, 99.8% was in equities and only 0.2% was in other capital.
Net Investments
It is the total FDI inflow minus FDI outflow (repatriation).
- The total/net FDI into India in 2020-21 was USD 54.9 billion, a 1.9% decrease over the previous year.
- Net FDI inflow has grown 79% over 7 years between 2013 to 2020, averaging 11.2% annual growth.
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