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India lured record $81.7 Billion in FDI; Gujarat remains the top recipient

Despite Covid shock, equity inflow grows 19%; Gujarat remains the top recipient. The huge inflow in the FDI comes due to various reasons, primarily reasons are a series of policy steps taken to improve ease of doing business and to attract investments into domestic manufacturing capacity and an ambitious infrastructure project pipeline.

India received nearly a record $82 billion in FDI, the highest ever and 19% growth on the year before. Saudi Arabia, Singapore, the USA, Mauritius being the top investors according to the data released by the Department for Promotion of Industry and Internal Trade (DPIIT) on Monday.

The boost in FDI inflow in the year ending March comes in the backdrop of a series of policy steps taken to improve ease of doing business and to attract investments into domestic manufacturing capacity and an ambitious infrastructure project pipeline.

“Measures taken by the government on the fronts of FDI policy reforms, investment facilitation and ease of doing business have resulted in increased inflows. The trends are an endorsement of India’s status as a preferred investment destination amongst global investors,” an official statement said.

“Out of top 10 countries, Saudi Arabia is the top investor in terms of percentage increase during FY21. It invested $2.8 billion in comparison to US$ 89.93 million reported in the previous financial year,” the statement said, adding that there was a 227 per cent and 44 per cent increase recorded in FDI equity inflow from the USA and the UK, respectively.

Among industries, computer software and hardware topped the investment chart in FY21 accounting for 44% share of the total FDI inflow. It is followed by construction (infrastructure) activities which accounted for 13% and services that accounted for 8% respectively, the statement said.

Gujarat was the top recipient of FDI among states, with 37 per cent share of total FDI equity inflows, followed by Maharashtra and Karnataka with 27 per cent and 13 per cent, respectively.

Gujarat attracted the lion’s share of inbound FDI under the computer software and hardware sector at 78 per cent. This was followed by Karnataka and Delhi at 9 per cent and 5 per cent, respectively.

“Majority of the equity inflow of Gujarat has been reported in the sectors ‘Computer Software & Hardware’ (94 per cent) and Construction (Infrastructure) Activities (2 per cent) during the FY21,” the statement said.

Computer software and hardware emerged as the top sector in FY21 with around 44 per cent of the total FDI equity inflow, followed by construction and infrastructure-related activities at 13 per cent, and services sector’s with 8 per cent.

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