The United States was the largest source of foreign direct investment (FDI) in India in 2022-23, followed by Mauritius, the United Kingdom, and Singapore. Singapore, the U.S. and the U.K. were among the major destinations for overseas direct investment (ODI) also, a Reserve Bank of India (RBI) analysis shows.

RBI’s provisional results of the 2022-23 round of the annual census on foreign liabilities and assets (FLA) covering cross-border liabilities and assets of the entities (viz., companies, limited liability partnerships (LLPs), alternative investment funds (AIFs) and partnership firms) with inward/outward direct investment (DI) was released on September 12.

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.

The survey also found that activities of overseas subsidiaries of Indian companies accelerated during 2022-23 with a 50% increase in sales and 61.5% increase in purchase in rupee terms. The increase in their export-to-sales (61.7%) and import-to-purchase (74.2%) ratios indicates their high foreign trade linkages, RBI analysis said. It also pointed out that the increase in variation of the purchase-to-sales ratio of overseas subsidiaries of Indian companies (86.4%) as compared with that of foreign subsidiaries in India (73.9%) reflected the divergence in their focus areas, nature of markets and patterns of value addition.

The survey also showed that in terms of market value, ODI growth outpaced the growth in FDI and, as a result, the ratio of inward to outward direct investment stood at 5.5 times in March 2023 as compared with 6.1 times a year ago and 5.6 times two years ago.

Of the 38,689 entities, which responded in the latest census round of RBI survey, 33,850 reported FDI and/or ODI in their balance sheet in 2022-23, the report said. While 27,319 entities had reported such investments in the previous census round also, 6,531 were new. Over three-fourths of the companies that reported inward direct investment were subsidiaries of foreign companies with a single foreign investor holding more than 50% of total equity, the report said.

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