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The Reserve Bank of India (RBI) in its latest monthly bulletin has said that gross foreign direct investment (FDI) flows to India, for the first time in a decade, declined on an annual basis in 2022-23 to $71 billion mainly due to a slowdown in the global economy. The annual decline works out to be 16.3 per cent in 2022-23 compared to inflows in 2021-22. The gross FDI inflows in 2021-22 were $81.97 billion, up 10 per cent over fiscal 2019-20. 

The previous year-on-year contraction in FDI was in 2012-13 when the inflows declined by 26 per cent to $34.298 billion. It stated net FDI too declined by nearly 27 per cent to $28 billion in 2022-23 as compared with $38.6 billion a year ago, mainly due to moderation in gross foreign direct investment inflows and an increase in repatriation.

It mentioned manufacturing, computer services and communication services recorded the highest decline in FDI inflows compared with the preceding year. The major contributors towards the fall in inflows during the same period were the US, Switzerland, and Mauritius. The bulletin quoted ‘fDi Intelligence’, to say India was the second largest recipient of FDI ($26.2 billion) in the semiconductor industry for the year 2022, second only to the US ($33.8 billion).