In FY-24, India’s net direct Foreign Investment plummeted to its lowest level since FY-12, standing at just $10.6 billion compared to the peak of $44 billion at the end of FY-21. Amidst this decline, there has been a noticeable pivot toward Foreign Portfolio Investments (FPI). Given this shift, I am embarking on a detailed analysis of FPI in India, examining the structure of investments and assets under custody across various sectors. This exploration aims to clarify the focal points and preferences of foreign portfolio investors, identifying the sectors they believe offer the greatest potential for returns. Additionally, since April 2024, there has been a significant withdrawal of FPI, a trend that will also be scrutinized to uncover deeper insights.
India’s Foreign Investment Trends
The chart below illustrates the trends in foreign investments in India over the financial years from FY-12 to FY-24. This visual representation helps to encapsulate the shifting dynamics and patterns of investment over more than a decade, providing a clear historical context for the recent changes in investment strategies.
