India has surpassed the Dragon in terms of foreign direct investment (FDI) in 2018 for the first time in the last 20 years. India's annual FDI was higher than that of China's with 253 inbound deals amounting to $39.515 billion. Data produced by global financial markets platform, Dealogic, China attracted FDI to the tune of $33.02 billion in 397 inbound deals in the same period. India had attracted FDI worth $18.57 billion in 205 inbound deals in 2017, while China's FDI amounted to $32.49 billion in 383 inbound deals.
Rucha Ranadive of CARE Ratings said, “The stable microeconomic environment and slowdown in the Chinese economy has helped India attract more FDI. In addition, the government of India has taken various initiatives. It has opened up various sectors for FDI investment and has promoted Single window clearance.” She added, “There have been signs of slowdown in the Chinese economy since the eruption of tariff war with the US. This has resulted in outflow of foreign funds, especially foreign portfolio investments, from the emerging market economies including India.”
The opening up of single brand retail, construction and power exchanges for foreign investment and allowing 100 per cent FDI in insurance broking is under consideration are few steps taken by the government that may have helped, Rucha said. Meanwhile, Union Minister Suresh Prabhu recently said India aims to receive $100 billion in foreign direct investments in the next two years and special industrial clusters are being created for countries like Japan, South Korea, China and Russia where their companies can invest and operate.
