Growth of FII and FDI in India

By Advisorymandi
2-April-2018 2:36:58 PM
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FII and FDI

India is one of the emerging economies, which is growing at a pace faster than any other emerging nations. It has recently overtaken China in terms of GDP growth.

Indian GDP in the third quarter of FY2017-18 rose by 7.2% higher than China which grew at a pace of 6.8% for the same period under scanner. This number was post the aftermath of demonetisation new form in tax rules regulation like GST, came in place. Further economist also revised the growth rate for the economy higher to 6.6% from the previous projection of 6.5% for FY18.

Finance ministry gave reason for the higher revision, as robust growth in investment climate, real gross fixed capital formation, which is estimated to be growing at a rate of 7.6% for the year 2017-18, which accelerated from the number of 6.9% in Q2 to 12% for the Q3 in the year 2017-18.

Domestic Equity market has also outperformed all other global market. Nifty has given a return on approximately 29% annually in 2017 whereas, Down Jones and Nikkei, has given a return of 25% and 19.56%, respectively annually over FY2017.

All these factors have definitely aided India to get higher investment from foreign institutions. Foreign institutional investment in equity crawled up by 9.21% on CAGR basis in past 11 months. Foreign institutional investors took more interest in debt market thus rising investment in debt by 12.32% for the same period under scanner. On an average, FII invested Rs4946.13 crores and Rs13699.59 crores , in equity and debt market, respectively.

The surge in foreign investment is backed up by positivity in the Indian economy, which has come in on lieu of higher positive and clean reforms taken up by the new government. This has resulted in contribution of India to be in a rising spree to world’s GDP. From contributing 2.6% in 2014 to world GDP, it has reached the height surpassing the mark of 3% to be at 3.1% for the FY2017.

Foreign direct investors have also put forward its step in making India a faster growing economy.FDI for the month of April’17-December’17 stood at $35.9 billion. Looking at sector wise contribution by FDI, telecommunication received the highest FDI inflow of $6.14billion, followed by computer software and hardware , the n services, which attracted  FDI inflow of $5.16billion and $4.62billion respectively, for the same period under scanner.

Highest contributor to FDI is Mauritius, from there India attracted an inflow of $13.35billion, second being Singapore, followed by Netherlands and USA, receiving inflow of US$ 9.21 billion, US$ 2.38 billion and US$ 1.74 billion, respectively.

Major reason behind the surge in foreign investment is political stability, array of reforms, digitisation to get the economy at par with global standards. Thus India‘ll continue to see such positivity as India grows with time to become one of the power economy, provided, India accept the new technology and new changes and innovation with open arms.

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Author: Advisorymandi

AdvisoryMandi is India's most trusted Stock Market Advisory marketplace covers NSE, BSE, MCX & NCDEX. Invest with confidence and harness the power of AdvisoryMandi to make smarter investment decisions in Stocks, Indices, Commodities, Forex & IPO.

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3 Comments on "Growth of FII and FDI in India"

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Rakesh Bhatt
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Rakesh Bhatt
1 year 1 month ago

Economic growth has a profound effect on the domestic market as countries with expanding domestic markets should attract higher levels of FDI inflows.

Sam Sinha
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Sam Sinha
1 year 1 month ago

Thanks for explaining “FII AND FDI”. Nice to read it

abhijat
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10 months 27 days ago

Good Info…

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