India’s net FDI flows surge to $38 bn in FY 2016

The Dollar Business Bureau

India’s net foreign trade investment (FDI) flows are likely to surge to almost $38 billion this fiscal year. The major progress in FDI profile is a reflection of progressive policy reforms and the recent regulatory liberalisation in select sectors.

According to a report of Kotak Institution Equities the net FDI flows stood at nearly $36 billion in FY 2016 when compared to $31 billion in the last fiscal. The report said that the nation’s position in FDI is estimated to further improve in 2016 with some positive signs.

Recently, FDI announced by Foxconn in investment projects were valued at $5 billion in the coming 2-3 years, while GE and Alstom signed a joint venture deal worth $5.9 billion with Indian Railways to strengthen the railway infrastructure.

According to Kotak Institutional Equities, there is an upward trend in the base-case predictions at 4.5% growth in net FDI inflows in fiscal to reach $38 billion if the recently made announcements do materialise. Real estate, construction, defence, civil aviation, private banking, news broadcasting, and single brand retail are some of the sectors that got benefited from relaxation.

The country’s net FDI inflows should improve further over time with continuous developments in terms of reforms in legal, regulatory, governance and market aspects. India should go beyond assembling units in the manufacturing sector for better FDI inflows. However, some early signs of foreign investments are boosting up the sector in establishing global manufacturing facilities in the country, the report said.