FDI in equities falls for first time in six years in 2018-19
By: FE Bureau | New Delhi | Published: May 29, 2019 5:16:44 AM
Foreign direct investment (FDI) in equities in India dropped for the first time in six years in 2018-19 (a first in the Narendra Modi-led NDA regime), with inflows into sectors like telecom, pharma and other sectors having recorded a decline. FDI in equities dropped marginally to $44.37 billion last fiscal, against a record $44.86 billion in 2017-18.
However, gross FDI inflows — which include FDI in equities, reinvested earnings, equity capital of unincorporated bodies and other capital–rose 6% year-on-year to $64.38 billion in 2018-19, showed the latest data by the Department for Promotion of Industry and Internal Trade (DPIIT). FDI in equities had last dropped (by 36%) in 2012-13 from a year before. Interestingly, after taking a lead over Mumbai up to the third quarter of 2018-19, New Delhi witnessed a drop in FDI inflows in the last quarter. Consequently, at $10.14 billion, FDI inflows into New Delhi trailed Mumbai’s ($11.38 billion)
FDI in telecommunication dropped to $2.67 billion in 2018-19 from $6.21 billion a year before, while in construction development, it eased to $213 million from $540 million. In pharmaceuticals, the inflows declined to $266 million last fiscal from $1 billion in the previous year.
Just before India’s new double taxation avoidance agreements with them are to kick in fully, Singapore beat Mauritius to emerge as New Delhi’s largest source of foreign direct investment (FDI). FDI in equity from Singapore jumped 33% y-o-y in the last fiscal period to almost $16.23 billion, while that from Mauritius dropped by almost a half to just $6.08 billion, showed the official data.