According to the Reserve Bank of India (RBI), India's foreign direct investment (FDI) commitments fell by 19.6 percent to $1.55 billion in November 2023, compared to over $1.93 billion in October 2023. They have halved compared to $3.67 billion in November 2022. data.
Outward foreign direct investment, expressed as a financial liability, consists of three components: equity, loans and guarantees.
A slowdown in economic and business activities worldwide has affected direct investment flows, both inbound and outbound. Most investments (outward FDI) are in subsidiaries or interests in foreign companies. A slowdown in developed markets means fewer opportunities, according to bankers.
Inward foreign direct investment (FDI) – money from abroad flowing into India as direct investment – has also entered a downward trend. RBI data showed that net foreign direct investment in India fell sharply to $4.5 billion in April-September 2023 from $19.6 billion in the same period last year, due to a moderation in global investment activities and a increase in repatriation.
Looking at the components of outward FDI, equity commitments fell from $870.37 million in October 2023 to $729.57 million in November 2023. This was significantly lower than the $1.69 billion recorded in November 2022.
Debt levels fell to $184.96 million in November from $250.42 million in October, also lower compared to $300.58 billion in November 2022.
Guarantees for overseas units fell to $637.26 million in November from $809.26 million in October. They were down substantially from $1.68 billion a year ago, RBI data showed.
First print: December 15, 2023 | 7:43 PM IST