1 year ago

Drop in FDI inflows mirrors global trend: Finmin

The decline in India’s net foreign direct investment inflows, which have dropped almost 31% to $25.5 billion over the first ten months of 2023-24, is in line with the slowdown in such investments to developing countries, the Finance Ministry has said, while holding out hope for an uptick in investments this year. While overall global FDI flows rose 3% to an estimated $1.4 trillion in 2023, economic uncertainty and higher interest rates did affect global investment, reflected in FDI flows to developing countries falling by 9%, the ministry said in its February review of the economy. “Mirroring the slowdown in FDI flows to developing countries, gross FDI inflows to India also dipped but only slightly in the period April 2023-January 2024. While a modest increase in global FDI flows is likely this calendar year, thanks to a decline in inflation and borrowing costs in major markets which may stabilise financing conditions for international investment deals, there are still significant risks, the ministry said. Citing an UNCTAD report, the ministry said that despite the drop in FDI inflows, the country witnessed “a stable number of new project announcements” keeping it in the top 5 destinations for global greenfield projects.

The Hindu

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