2024 will probably see a rise in FDI inflows as India continues to be a "preferred investment destination

 2024 will probably see a rise in FDI inflows as India continues to be a "preferred investment destination

2024 will probably see a rise in FDI inflows as India continues to be a "preferred investment destination

In 2024, there is a projected rise in foreign direct investment into India because of favorable PLI policies, enhanced industrial output, and robust macroeconomic indicators.

India is expected to see a rise in foreign direct investment in 2024 as a result of encouraging PLI programs, growing industrial output, and solid macroeconomic indicators.

In 2024, foreign direct investment in India is anticipated to increase due to favorable macroeconomic statistics, enhanced industrial output, and appealing PLI initiatives that would draw in more foreign investors amidst geopolitical challenges and a restrictive global interest rate environment.

To guarantee that India continues to be a desirable and welcoming location for investors, The Department for Promotion of Industry and Internal Trade (DPIIT) Secretary, Rajesh Kumar Singh, said that the government continuously evaluates the FDI policy after extensive stakeholder participation. Later on, it sometimes changes.

Foreign direct investment (FDI) fell by 22% to $48.98 billion in the nation between January and September of this year. The amount coming in was US$62.66 billion around the same time last year. We do, however, generally follow the general trend of growing FDI. Inflows of foreign direct investment (FDI) into India from 2014 to 23 totaled over US$ 596 billion, about twice as much as what India got from 2005 to 2014. According to Singh, PTI, "the trend is positive and India is still the preferred destination for foreign players."

He claims that production linked incentive (PLI) programs are beginning to pay off and are drawing in foreign investment in industries including pharmaceuticals, food processing, and medical devices. "Many of these sectors have seen a surge in FDI," Singh said. The prospect of a worldwide recession, the economic crisis brought on by the war between Russia and Ukraine, and protectionist policies, he added, might be the primary causes of the fall in foreign direct investment inflows. Are.

As a significant source of foreign direct investment (FDI) into India, he claimed the drop in the real GDP growth rates of the US, UK, and Singapore might also be a contributing cause. Singh also underlined how India keeps opening its economy to foreign capital by lifting FDI restrictions, lowering regulatory obstacles, building infrastructure, and enhancing the business climate.

Experts believe that India remains a popular location for investments notwithstanding global concerns. He said that there is cause for confidence about foreign money inflows in 2024 due to initiatives done to improve ease of doing business, skilled labor availability, natural resources, liberal FDI policy, sizable domestic market, and PLI programs.

The amount of greenfield investment projects in developing nations that have been announced has grown by 37%, according to UNCTAD's World Investment Report 2023. "This is a positive sign for investment prospects in industry and infrastructure," it said. According to economist Rumki Majumdar of the consulting firm Deloitte India, lower global liquidity and geopolitical unpredictability are to blame for the decline in capital inflows. It has been a challenge. "But soon the world will recognize the strength of India's fundamentals and India will see an increase in capital inflows," he said.

According to Majumdar, international investors are really interested in using India's potential and joining the nation on its current decade-long economic trajectory. What should be highlighted, according to Anindya Ghosh, a partner at the legal firm IndusLaw, is that foreign direct investment (FDI) has also significantly decreased globally. India may find some comfort in the fact that it was the only nation to experience the most recent economic downturn. Not present. Decline. There have been many worries lately about the fall in foreign direct investment (FDI) in India, but evidence points to a possible minor recovery in FDI inflows in 2024, according to Ghosh.

In the first half of 2023–24, the Indian economy expanded by 7.7 percent, according to the National Statistical Office (NSO). The industrial production of the nation reached a 16-month high of 11.7% in October, driven by double-digit growth in the manufacturing, electricity, and mining sectors. The nation's foreign currency reserves exceeded US$600 billion. In addition, PLI programs covering 14 industries have been launched to strengthen India's export and manufacturing capacities.

The industries covered by the projects, which have a total budget of Rs 1.97 lakh crore, include auto components, communications, and white goods. Total foreign direct investment (FDI) into India from April 2000 to September 2023 was US$953.14 billion.

The Mauritius route accounted for about one-fourth of all foreign direct investment throughout the assessment period. Singapore (23 percent), the United States (9 percent), the Netherlands (7 percent), Japan (6 percent), and the United Kingdom (5 percent) came next. Germany, the Cayman Islands, Cyprus, and the United Arab Emirates all hold 2% shares. The services industry, computer software and other hardware, telecommunications, commerce, construction development, automobiles, chemicals, and pharmaceuticals are the main industries in India that drew the most foreign direct investment. Most industries allow FDI automatically, but others, including media, insurance, telecommunications, and pharmaceuticals, provide government incentives to foreign investment. Damage is required.

While a foreign investor using the automated method merely has to notify the Reserve Bank of India (RBI) after making an investment, those using the government approval route must first get prior clearance from the relevant ministry or department. FDI is now prohibited in a few sectors. Lotteries, gaming and betting, chit funds, nidhi firms, real estate, and tobacco-based cigar, cheroot, cigarillos, and cigarette manufacture are among them. FDI is crucial since, in order to support development, India would need significant investments in its infrastructure sector in the next years. Both the rupee's value and the balance of payments are supported by robust foreign inflows.