Foreign direct investment (FDI) in India grew by 13 percent to a record of USD 49.97 billion in the 2019-20 financial year, according to official data.

The government said: “Measures taken by the government on the fronts of FDI policy reforms, investment facilitation and ease of doing business have resulted in increased FDI inflows into the country”.

Sectors which attracted maximum foreign inflows during 2019-20 include services (USD 7.85 billion), computer software and hardware (USD 7.67 billion), telecommunications (USD 4.44 billion), trading (USD 4.57 billion), automobile (USD 2.82 billion), construction (USD 2 billion), and chemicals (USD one billion), the Department for Promotion of Industry and Internal Trade (DPIIT) data showed.

According to the announcement, the administration plans to make the FDI strategy more cordial and eliminate the approach bottlenecks that have been impeding the venture inflows into the nation. FDI is largely made by multinational companies, large institutions, and private equity firms. A major chunk of this funding has to be attributed to the investments made in Reliance and Jio platforms.

According to an earlier report of UNCTAD, India had moved into the list of top-10 countries in terms of FDI inflows in 2019 by attracting $50 billion. Despite the Covid-19 related downside risks, positive economic growth of the country in the post-pandemic period, and its large market will continue to attract market-seeking investments, found UNCTAD.

FDI into India has been on a long-term growth trend and India’s large market will continue to attract market-seeking investments. However, the magnitude of the logistical challenges during both the lockdown and the recovery remains a big downside risk for FDI in the medium term.