Larger FDI flow in the manufacturing sector in the medium term - Acuité Ratings & Research

Mr.Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research on FDI India FY21

"Despite the severe impact of Covid on the Indian economy in FY21, the FDI equity inflow in India has grown by 19% to USD 59.64 billion from USD 49.98 billion in FY20. The government has been making efforts to enhance FDI through various measures such as (i) reduction of corporate tax rates (ii) liberalisation of FDI investment limits in some sectors and (iii) the production linked investment (PLI) scheme launched last year to boost foreign investment in the manufacturing sector. Some of these measures have started to yield results although a substantial part of these investments has been in the digital technology, telecom and e-commerce space and in a particular private sector group in the previous year. India also continues to attract a healthy flow of capital in the real estate sector, the weakness in domestic demand notwithstanding; the warehousing space has been a major beneficiary. Over the medium term, we expect to see a much larger FDI flow in the manufacturing sector particularly in the electronics hardware, chemicals and pharmaceuticals sector."

Source : Equity Bulls

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