• According to the latest data of the Department of Industrial Policy and Promotion (DIPP), FDI in 2017-18 grew by only 3 per cent to USD 44.85 billion.

• Foreign direct investment (FDI) in India seems to be petering out with the inflows growth rate recording a five year low of 3 per cent to USD 44.85 billion in 2017-18.

• Foreign inflows in the country grew by 8.67 per cent in 2016-17, 29 per cent in 2015-16, 27 per cent in 2014-15, and 8 per cent in 2013-14.

• However, the FDI inflows recorded a negative growth of 38 per cent in 2012-13.

• According to the experts, it is critical to revive domestic investments and further ease of doing business in the country to attract foreign investors.

• An UNCTAD report, too, has recently stated that the foreign direct investment in India decreased to USD 40 billion in 2017 from USD 44 billion in 2016 fiscal.

• However, outflows from India, the main source of the FDI in South Asia, more than doubled to USD 11 billion, the report stated.

• Mauritius has emerged as the largest source of FDI in India with USD 15.94 billion in 2017-18 followed by Singapore (USD 12.18 billion), Netherlands (USD 2.8 billion), the US (USD 2.1 billion) and Japan (USD 1.61 billion).

• India has done ‘considerably’ well in terms of moving up the ranking for ease of doing business; however, it needed to reach a level that creates enthusiasm for overseas investors.

• FDI is important as India would require huge investments in the coming years to overhaul its infrastructure sector to boost growth.
• Decline in foreign inflows could put pressure on the country’s balance of payments and may also impact the value of the rupee.

• Foreign direct investment (FDI) is an investment made by a company or individual in one country in business interests in another country, in the form of either establishing business operations or acquiring business assets in the other country, such as ownership or controlling interest in a foreign company.

• Foreign direct investments are distinguished from portfolio investments (FPI) in which an investor merely purchases equities of foreign-based companies.

• The key feature of foreign direct investment is that it is an investment made that establishes either effective control of, or at least substantial influence over, the decision making of a foreign business.

• The ability to attract large scale Foreign Direct Investment (FDI) into India has been a key driver for policy making by the Government.

The Hindu, Investopedia.