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For the first time in 20 years India overtakes China in FDI inflows

India under Prime Minister is continually progressing. It is outpacing all other countries. In a recent development, India has outpaced China in FDI inflows for the first time in 20 years

In 2018, India saw more than $38 billion of inbound deals compared with China’s $32 billion, buoyed by stable fundamentals, a bankruptcy code and fresh opportunities in sunrise sectors.

India’s foreign direct investment (FDI) was the highest ever with 235 deals amounting to $37.76 billion this calendar year, according to data from Dealogic, a global M&A and capital markets data provider, beating China, which has historically been the favourite for emerging market bets. China’s trade standoff with the US is seen as a major reason for the slowdown.

From Walmart to Schneider Electric and Unilever on the one side and TPG Capital or KKR on the other,a tide of global capital is flooding into India from strategic investors to financial sponsors and consequently changing the pecking order of mega M&A sweepstakes in the prized market of Asia.

Global investors typically focus on India despite short-term uncertainty over the political climate, be it state or federal elections, said Sonjoy Chatterjee, chairman, Goldman Sachs in India.

“The macro overlay is that conditions are stable when you look at the big barometers, whether it is inflation, fiscal deficit or growth,” he said. “Also, the current account deficit has moved around due to oil and the currency but seems to be settling back.”

Foreign institutional investors also have poured in Rs 9,080 crore into the Indian market in November as compared to Rs 38,906 crore withdrawals made in October. Few days back foreign portfolio investment (FPI) has also touched new records

In the month of November, overseas investors have pumped Rs 12, 260 crore into the Indian capital markets making it the highest inflow in 10 months. Out of the Rs 12, 260 crore invested in the market, FPIs invested a net sum of Rs 6,913 crore in equities in November and Rs 5, 347 crore in the debt market as recorded by the latest depository data.

Whereas in the previous months, foreign portfolio investments had not shown good records. In the month of July and August FPIs had invested Rs 7,300 crore in the market while in the month of September and October the inflow came following a net withdrawal of close to Rs 60,000 crore from the capital markets (equity and debt together). Before this it was in January when foreign portfolio investors had put in Rs 22,240 crore in the capital markets.

These all are positive indicators for our economy. Increasing foreign portfolio investments and foreign institutional investments will lead to rise in the value of rupee since there is more demand for the home currency from foreign investors after entering the country.

Those who always attack Prime Minister Modi and his Government must see how he is developing and transforming the nation

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