In FY23 FDI inflows fell 16% to $71 billion - the first dip in a decade

Inflows of foreign direct investment (FDI) into the nation decreased 16% to $71 billion in 2022–23, the first dip in ten years, due to a sluggish global economy

India defied the pattern even in 2020, the year of the Covid-induced lockdown, when inflows soared as a result of significant investments made by tech behemoths in startups and Reliance Jio.

But despite being major recipients of the excess cash circulating around the world, startup funding has dried up due to high inflation and lacklustre demand in the US and Europe. Despite this, officials and analysts continue to predict that the decline in flows will be reversed and that investors would likely increase their investments after the current period of global unrest has passed.

Outward flows decreased by 23% to $13.6 billion, demonstrating that Indian businesses also slowed down their foreign investments.

The government is relying on sizable investments from international powerhouses to increase manufacturing activity in crucial industries like electronics, chemicals, autos, and textiles in order to not only satisfy domestic demand but also exports and integrate India into the global value chain, as reported by Economic Times