Maharashtra, India’s most industrialised state, has witnessed a 32 per cent decline in foreign direct investments (FDI) at $13.4 billion in the fiscal ended March 2018 compared to $19.7 billion in FY17, indicating that investments aided by foreign companies were on the decline in the state. However, the state maintained its top-most position in attracting FDI during the fiscal.
FDI inflows to Andhra Pradesh declined by 43 per cent while that of Gujarat fell by 38 per cent in FY18. Karnataka witnessed substantial increase in inflow from $2.1 billion in FY17 to $8.6 billion in FY18, a growth by more than 300 per cent, said a report on FDIs by Care Ratings. Other states which received more inflows are Tamil Nadu (57 per cent growth) and Delhi (30 per cent growth) compared with the FDI inflows in FY17. The fall in FDI inflows to Maharashtra has happened at a time when the country as whole recorded a marginal rise in inflows.
In FY18, FDI equity inflows amounted to $44.86 billion, 3 per cent higher than the inflows worth $43.48 billion in the previous year. This is the lowest growth recorded in the past five years, according to the Care study. Country-wise FDI inflows indicated that Mauritius continues to dominate the FDI investment with 36 per cent share ($15.9 billion), followed by Singapore (27 per cent) and Netherlands (6 per cent) in total FDI inflows worth $ 44.86 billion in FY18.
It said the services sector accounted for the highest share of 15 per cent followed by computers (14 per cent) and telecom (14 per cent). Construction development sector had the lowest share of one per cent in the total inflows in FY18. In FY18, all sectors registered a growth compared with the inflows in FY17 barring services, in which the inflows declined by 23 per cent and chemicals 6 per cent.
Inflows in construction development sector grew considerably from $ 105 million to $ 540 million, a rise of more than 400 per cent. Trading sector registered 86 per cent growth while 68 per cent growth was witnessed in computers — software and hardware sector — in FY18.
In terms of region-wise FDI inflows, on the cumulative basis, Maharashtra (including Dadra & Nagar Haveli and Daman & Diu) received highest FDI inflows amounting to $ 115.7 billion, which is close to 31 per cent of the total FDI equity inflows since FY01. Delhi had the second highest share of 20 per cent ($ 75.7 billion) while Karnataka had 8 per cent share ($ 30.9 bn) during FY2001-FY2018. Considering the cumulative flows since FY01, the top five sectors (services, computer software and hardware, telecommunication, construction development and automobile industries) accounted for nearly 45 per cent of the total cumulative FDI inflows.
Since April 2000, the total inflows of FDIs in the Indian economy on cumulative basis amounted to $ 546 billion. Over these 18 years the total FDI inflows have grown at a compounded annual growth rate of (CAGR) of 17 per cent per annum, Care Rating said.
The cumulative FDI equity inflows accounted for nearly 69 per cent of the cumulative total FDI inflows aggregating to $ 377 billion. During FY2001-FY2018, the FDI inflows in equity have increased at a CAGR of 19 per cent per annum.