Meanwhile, the US was the largest source of inward foreign direct investment (FDI) in India in fiscal year 2023, followed by Mauritius, the UK and Singapore with the top ten countries accounting for over 90 per cent of the flows.

According to RBI data, the US brought in Rs 8.58 lakh crore ($103 billion) FDI in FY23 as against Rs 8.05 lakh crore in the previous, accounting for 17.2 per cent of the share. FDI from Mauritius was Rs 7.43 lakh crore (Rs 7.79 lakh crore) accounting for a share of 14.9 per cent and the UK Rs 7.08 lakh crore (Rs 5.83 lakh crore).

While the total FDI flow in FY2023 was Rs 49.93 lakh crore ($ 601 billion) as against Rs 46.72 lakh crore a year ago, other major FDI contributors included Singapore (Rs 6.59 lakh crore, Netherlands (Rs 5 lakh crore) and Japan (Rs 3.98 lakh crore). Of this, Rs 47.75 lakh crore was by way of equity and the balance was debt.

The data is from the RBI’s annual census on foreign liabilities and assets (FLA) covering cross-border liabilities and assets of the entities (companies, limited liability partnerships, alternative investment funds and partnership firms) with inward/outward direct investment (DI). Out of the 38,689 entities, which responded in the latest census round, 33,850 reported FDI and ODI in their balance sheet as at end-March 2023.

The manufacturing sector continued to attract the largest share of FDI equity, both at market value as well as at face value. Among services, information & communication and financial & insurance activities were the major FDI recipient sectors.

“Over 97 per cent of the responding DI entities were unlisted in March 2023 and they accounted for a bulk of the FDI equity capital in India,” according to the RBI report. Non-financial companies retained the lion’s share of the FDI equity at face value. The market value of FDI in unlisted firms surpassed that in listed companies.