US second biggest foreign investor in for India

THE US has emerged as the second biggest source of foreign direct investment (FDI) into India, replacing Mauritius, during the first half of the current financial year, according to data from the Commerce and Industry Ministry.

During April-September 2020, India attracted FDI worth $7.12bn from the US and $2bn from Mauritius, which slipped to fourth position, the Department for Promotion of Industry and Internal Trade (DPIIT) data showed.

Mauritius was the second biggest FDI source during the same period previous year. The US was the fourth biggest investor during that period.

Singapore with $8.30bn foreign inflows continued to be the top source of FDI for India in April-September 2020-21. The country has received $2.1bn inflows from Cayman Isands.

The islands was followed by Netherlands ($1.5bn), the UK ($1.35bn), France ($1.13bn), Japan ($653m) , Germany ($202m), and Cyprus ($48m).

According to experts, increasing FDI from the US reflects the further strengthening of economic ties between the two countries. The US was also India’s top trading partner in 2019-20.

Biswajit Dhar, a professor of economics at Jawaharlal Nehru University, said: ‘The US technology companies are buying stakes in Indian companies that is why FDI numbers are showing increase”.

Despite the fact that FDI from Mauritius is coming down, it still accounts for 29% of the total inflows received by India during April 2000 and September 2020. In this period, India has attracted $500.12bn foreign direct investment.

Foreign inflows into India grew by 15 per cent to $30bn during the first half of the current fiscal. In August, the country had attracted $17.5bn worth of foreign investments.

Foreign portfolio investors (FPI) remained net buyers for the second consecutive month in November by pumping in a whopping $630bn in Indian markets.

For equities segment, this is the highest quantum of money invested ever since the FPI data has been made available by the National Securities Depository Ltd.

According to depositories data, FPIs invested a net $630bn into equities and $25.93bn in debt segment, taking the total net investment to $630bn between November 3-27. Global investors are preferring to invest in emerging markets more than developed markets as the potential upside is much higher in emerging market, according to the market experts.