FDI Grew 18% in FY18
29, Jan 2019
Prelims level : Economy Mains level :
- Foreign direct investment (FDI) during the previous fiscal grew 18 per cent to Rs 28.25 lakh crore, data from the Reserve Bank of India (RBI) shows.
- FDI increased by Rs 4,33,300 crore, including revaluation of past investments, during 2017-18 to reach Rs 28,24,600 crore in March 2018 at market value, according to RBI data on ‘Census on Foreign Liabilities and Assets of Indian Direct Investment Companies, 2017-18’.
- The RBI said as many as 23,065 companies responded to the latest round of the census, of which, 20,732 firms had FDI or ODI (Overseas direct investment) in their balance sheet in March 2018. Overseas direct investment (ODI) by Indian companies has increased by 5 per cent to Rs 5.28 lakh crore. “FDI companies witnessed a substantial increase in other investment liabilities, largely due to the increase in trade credit,
- The census showed that Mauritius continued to be the largest source of FDI in India (19.7 per cent) followed by the US, the UK, Singapore and Japan.In case of overseas investment by Indian companies, Singapore (17.5 per cent) was the major destination, followed by the Netherlands, Mauritius and the US.
What Is FDI (Foreign Direct Investment)?
- Foreign direct investment (FDI) is when a company owns another company in a different country. FDI is different from when companies simply put their money into assets in another country—what economists call portfolio investment.
- With FDI, foreign companies are directly involved with day-to-day operations in the other country. This means they aren’t just bringing money with them, but also knowledge, skills and technology. A lot of economists really like FDI, especially when it’s flowing from rich countries into poorer countries. The idea is that when international companies come in, they can either shake up an existing industry, because they’re bringing competition for the domestic companies that already exist, or can create entirely new industries. FDI can also strengthen local economies by creating new jobs and boosting government tax revenues.