fdi-in-india-rises-10-in-fy20-ie

Context: Foreign direct investment into India rose 10 per cent to $42.69 billion in the year ended March 31, 2020 from $38.74 billion in the previous year despite the global slowdown, with the Cayman Islands showing the biggest jump in bringing cash in to India.

Analysis

  • According to the Reserve Bank of India data, FDI from Cayman Islands jumped 305 per cent thus becoming the fourth largest FDI contributor behind Singapore, Mauritius and the Netherlands. 
  • The main activity in Cayman Islands, the British Overseas Territory and one of the most popular tax havens, is financial services. 
  • Singapore and Mauritius remained the major source countries, accounting for about 50 per cent of total FDI flows in 2019-20, followed by the Netherlands, the Cayman Islands, the US and Japan, according to the RBI data. 

  • India was the 9th largest recipient country globally in 2019.
  • Most of FDI equity flows went to the services sector, including communication services, retail and wholesale trade, financial services, computer and business services and the manufacturing sector. 
  • The manufacturing sector got $ 8.15 billion, communication services $ 6.83 billion and retail trade $ 4.91 billion (decreasing order).