A significant growth in India's appeal as a global investment destination.

India's Foreign Direct Investment (FDI) inflows have crossed the $1 trillion mark, with a notable increase of 26% to $42.1 billion in the first half of the current financial year. This milestone reflects a significant growth in India's appeal as a global investment destination. While FDI equity inflows declined slightly in 2023-24, total FDI inflows experienced a marginal decrease.

What exactly is the current scenario?

·Cumulative FDI: India has received a cumulative $1 trillion in FDI since April 2000, with a significant portion (almost 70%) occurring in the last decade (April 2014 to September 2024).

·Recent Inflows: During the first half of the current financial year, FDI inflows increased by almost 26% to $42.1 billion.

·Sectoral Trends: While some sectors like services, computer software, and telecommunications experienced a dip in inflows, construction and power sectors saw healthy growth.

·Top Investors: Mauritius and Singapore have been major sources of FDI for India, with Mauritius contributing $164.83 billion and Singapore contributing $151.16 billion from April 2000 to June 2023.

·Major States: Maharashtra, Karnataka, and Gujarat are among the top states receiving FDI, with Maharashtra attracting the highest inflows (US$ 58.43 billion) from April 2000 to June 2023.

India-UAE – A strategic partnership

In October 2024, at the 12th meeting of the India-UAE high-level task force on investments held in Mumbai, the United Arab Emirates (UAE) committed to investing up to $100 billion in India across various sectors, as part of a strategic partnership aimed at enhancing bilateral economic ties. This initiative builds upon the earlier commitment of $75 billion made in 2018, with the additional $25 billion reflecting expanded collaboration under the Comprehensive Economic Partnership Agreement (CEPA) signed in 2022 .

While specific allocations are still being finalised, the investment is expected to span the following key sectors:

·Energy & Renewable Energy: Investments will focus on renewable energy projects, including green hydrogen production and transmission infrastructure, aligning with both nations' sustainability goals .

·Artificial Intelligence & Digital Technologies: The UAE plans to invest in India's AI and digital infrastructure sectors, aiming to leverage India's technological capabilities and foster innovation .

·Infrastructure & Logistics: Significant funds are earmarked for developing ports, roads, and logistics networks, enhancing connectivity and trade efficiency between the two countries .

·Food & Agriculture: A dedicated food corridor is being established, with an initial investment of $2 billion, to bolster food security and agricultural trade .

·Manufacturing & Industrial Development: The investment will support the expansion of manufacturing capabilities in India, contributing to job creation and economic growth .

·Financial Services & Fintech: Collaborations in financial services aim to enhance fintech solutions and cross-border financial integration .

 Strategic Initiatives and Collaborations

·Invest India Office in Dubai: To facilitate and streamline investments, an Invest India office is being established in Dubai, serving as a hub for UAE investors interested in Indian markets .

·Educational Collaborations: Plans are underway to establish campuses of premier Indian institutions, such as the Indian Institute of Management (IIM) and the Indian Institute of Foreign Trade (IIFT), in the UAE, fostering educational and cultural exchange .

These initiatives underscore the deepening economic and strategic partnership between India and the UAE, with the $100 billion investment serving as a cornerstone for future collaboration and mutual growth.

Beyond this, India and the UAE are also planning to set up a food corridor, investing over $2 billion in 2-2.5 years. This includes plans to set up a series of food parks in India.

(This report is compiled from various news in the media)