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WHAT HAS HAPPENED ?
India's Foreign direct investment (FDI) stood at $58.8 billion in 2021 22 with Singapore, followed by the US, emerging as the top contributor among the list of 15 nations. Meanwhile, China remains a notable absentee in the list.
The country has not been there in the list of main contributors to India's foreign inflows since 2017-18, according to Reserve Bank of India (RBI) data.
FUNDS RECEIVED FROM COUNTRIES ?
In the list of country-wise FDI inflows into India in 2021-22, Singapore was the leading contributor with $15.9 billion worth of inflows, Followed by the United States at $10.5 billion and Mauritius at $9.4 billion.
However, it is the inflows from tax haven Cayman Islands amounting to $3.8 billion -Trumping even major economic powers like the UK, Germany, the UAE, Japan and France -- that stood out in the list of country-wise contributors to India's FDI in 2021-22.
Experts say that even if inflows from such tax havens could be pure investments by foreign entities, these can turn volatile in the long run.
In fact, Singapore has been the leading contributor to India in terms of country-wise foreign inflows for the past five years, starting from 2017-18.
The island nation contributed $12.2 billion in 2017-18, $16.2 billion in 2018-19, $14.7 billion in 2019-20 and $17.4 billion in 2020-21 to India's foreign inflows.
BUT WHY CHINA IS MISSING ?
China, though, has been a notable absentee from the list of country wise contributors to India's FDI inflows.
Experts, however, attribute China's absence to the fact that India approves company-wise FDI proposals from China.
In July, out of 382 FDI proposals received by the Centre from Chinese firms, only 80 were approved, according to media reports.
Foreign investors have pumped in a little over 51,200 crore into the Indian equity markets in August, making it the highest inflow in 20 months, amid improving risk sentiment and stabilisation in oil prices.
This comes following a net investment of nearly 5,000 crore by Foreign Portfolio Investors (FPIs) in July, data with depositories showed.
FPIs had turned buyers for the first time in July after nine straight months of massive net outflows, which started in October last year.
Between October 2021 till June 2022, they withdrew 2.46 lakh crore from the Indian equity markets.
India will continue to attract FPI flows this month too, although at a slower pace as compared to August, Given continued rate hikes by the U.S. Federal Reserve along with quantitative tightening
The State Bank of India (SBI), in its latest research, said that India is likely to get benefit from a slowdown in investment intentions in China.
The report called 'Ecowrap' believes that the China story may now be facing clear headwinds
It says that India seems to be enjoying the "There is no alternative" factor as all countries are facing the churn globally, while India seems to be the best-placed jurisdiction in terms of growth and inflation outlook in 2022-23.
The report said that China is also facing a bleak outlook on the back of a construction sector meltdown, Citing that the sizes of the family will gradually shrink as the population ages, which will further lead to a decrease in housing demand in the long run.
Citing Apple's recent decision to shift part production of its flagship iPhone 14 model for worldwide shipping from India, the SBI Research believes it bears testimony to the optimism of India benefitting from China's slowdown.
It further stated that India's housing sales grew 60% on a yearly basis to 158,705 units during the January-June period.
