India received $35.37 billion foreign direct investment during April-August 2020, the highest so far for the first five months of a financial year.
The FDI flows, which include equity, reinvested earnings and other capital, for the period was 13% higher than $31.6 billion received in the first five months of 2019-20.
Total equity flows in the first five months was at a record $27.1billion, 16% higher than $23.35 billion inflows in the year-earlier period.
“India is preferred destination for foreign direct investment under Prime Minister @NarendraModi ji's leadership,” tweeted commerce and industry minister Piyush Goyal. “In last six years, FDI inflow (increased) 55%. During April-August 2020, despite Covid-19, FDI inflow (increased) 13%, highest ever for first five months of a financial year.”
More than $20 billion FDI inflows came in July and August alone as, according to data released by the department for promotion of industry and internal trade last month, total FDI into India in the first quarter ended June had plunged by 60% year on year at $6.5 billion.
The flows may have got a substantial boost from equity sales in Jio Platforms, a subsidiary of Reliance Industries, that received ₹1.5 lakh crore (about $20 billion) investment in the current fiscal. It is not clear how much of this investment had already come in by the end of August as the government does not maintain company-level data.
“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,” the commerce and industry ministry said in a statement.
Fresh equity flows are the dominant component of FDI, followed by reinvested earnings on earlier FDI. Other capital makes up a smaller percentage of the total flows.
Investment in Reliance Retail is expected to boost inflows in the coming months. The company has raised Rs 37,710 crore from foreign investors such as Silver Lake, KKR, General Atlantic, Mubadala, GIC, TPG and ADIA over September and October.
These trends are an endorsement of India’s status as a preferred investment destination amongst global investors, the government said.
“The intent all this while has been to make the FDI policy more investor friendly and remove the policy bottlenecks that have been hindering the investment inflows into the country,” the statement said.
Total FDI inflow grew 55% from $231.37 billion in 2008-14 to $358.29 billion in 2014-20.