Threat of a global recession, economic crisis triggered by the Russia-Ukraine war and dip in the real GDP growth rate of countries like Singapore, the US and UK are some of the reasons for FDI decline in India in 2022-23, Parliament was informed on Friday.
Foreign direct investment (FDI) into India declined 22 percent to $46 billion in 2022-23, dragged by lower inflows in computer hardware and software, and automobile industry.
Total FDI, which includes equity inflows, reinvested earnings and other capital, also declined 16 percent to $70.97 billion in the last fiscal as against $84.83 billion in 2021-22.
In a written reply to the Rajya Sabha, Minister of State for Commerce and Industry Som Parkash said the major reasons for shortfall in FDI in 2022-23 include a tighter financial environment and a string of financial crises in global markets in general and developing markets in particular besides the economic crisis due to Russia-Ukraine conflict.
"Post pandemic, countries have adopted various protectionist measures to decrease reliance on other countries and protect their own domestic industries. This could also be a possible reason affecting investor sentiments. The real GDP growth rates of Singapore, the US and UK have decreased in 2022, which are the major source countries for FDI," he said.
