India has moved up one spot to take the 7th spot among the top 20 host economies for 2021

India is fast becoming a favoured destination for foreign investments in the manufacturing sector, according to data released by the Ministry of Commerce & Industry on Thursday.

When compared to FY 2020–21 (USD 21.34 billion), the Foreign Direct Investment (FDI) equity inflow into the manufacturing sector surged by 76% in FY 2021–22 (USD 12.09 billion).

In contrast to the 97 nations that confirmed FDI during the prior FY 2020–21, 101 countries confirmed FDI during FY 2021–22, the ministry said.

In FY 2021–22, Singapore (27.01%) and the United States (17.94%) emerged as the top two sourcing countries for FDI equity flows into India. Mauritius (15.98%), the Netherlands (7.86%), and Switzerland were next (7.31%).

It should be noted that India has moved up one spot to take the 7th spot among the top 20 host economies for 2021, according to the UNCTAD World Investment Report (WIR) 2022, which analyzes worldwide trends in FDI inflows.

According to the latest data, Computer Software & Hardware (24.60%), Services Sector (12.13%), Automobile Industry (11.89%), Trading (7.72%), and Construction Activities (5.52%) round out the top five sectors in terms of FDI Equity Inflows during FY 2021-22.

Karnataka (37.55%), Maharashtra (26.26%), Delhi (13.93%), Tamil Nadu (5.10%), and Haryana (4.76%) are the top 5 states in India that have gotten the most FDI equity inflow in FY 2021–2022.

Under the FDI policy regime, the government has carried out a number of revolutionary changes in industries including insurance, defence, telecom, financial services, pharmaceuticals, retail trade, e-commerce, construction and development, civil aviation, manufacturing, and more.

In India FDI up to 100% is allowed in non-critical sectors through the automatic route, not requiring security clearance from the Ministry of Home Affairs (MHA). Prior government approval or security clearance from MHA is required for investments in sensitive sectors such as defence, media, telecommunication, satellites, private security agencies, civil aviation and mining, besides any investment from Pakistan and Bangladesh.

All foreign investments are required to be in compliance with the applicable entry route, sectoral cap, attendant conditions, sectoral laws, Companies Act, 2013 and rules thereunder, pricing guidelines, documentation and reporting requirements, the Ministry of Commerce and Industry pointed out.