Slowdown in FDI raises concerns if India is really gaining prominence as an alternative to China. Will foreign money inflow continue to stay unimpressive as slowdown in FDI flows continues largely due to rise in repatriation of equity capital, global economic slowdown and reduced venture capital funding at startups?
Is India losing its charm among foreign investors? Well, the answer depends on which dataset one is considering. There may be green shoots of mild recovery in parameters like foreign direct investments (FDI) and foreign institutional investors (FIIs) inflows into asset like equities and debt instruments, but the decline in those financial accounts in the previous few months have been acute.
Net FDI in India plunged over 38 percent in the first 10 months of financial year 2024 to $15.42 billion mainly due to a rise in repatriation, shows Reserve Bank of India (RBI) data. In the same period of April 2022-January 2023, FDI in India was at $24.99 billion.