Strong FDI growth in FY16 but loss of interest in pharma and telecom

Foreign Direct Investment (FDI) inflow in the country witnessed a strong growth of 29.32% that translated to $40 billion for 2015-16.

Almost 55% of the FDI came from Singapore ($13.6 billion) and Mauritius ($8.3 billion) in 2015-16. Mauritius which used to be the top contributor of FDI into India was overtaken by Singapore in 2015-16. FDI inflows from Mauritius declined by 7% in last fiscal, whereas FDI from Singapore grew by whooping 103%. UAE and USA also increased their investments in India, FDI inflow from UAE and USA increased 168% and 130%, respectively.

For the year the general service Industry (which includes BFSI, BPO, R&D etc) received the highest inflows worth $6.8 billion followed by IT sector with $5.9 billion.

IT sector saw maximum increase in FDI inflows in 2015-16 from last year, inflows increased by 157%. Other sectors which saw massive grown in FDI inflows were chemicals and hospitality. On the other hand FDI inflows almost halved in sectors such as telecom, pharma as compared to last year. Many Indian pharma companies have received warning letters recently and its impact is quite evident in the FDI inflow numbers in the sector. Even automobile and real estate witnessed decrease in FDI inflows from last year.