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 Secretary of the Department for Promotion of Industry and Internal Trade (DPIIT) Rajesh Kumar Singh has said hardening interest rates globally and worsening geo-political situation have impacted the foreign direct investment (FDI) inflows into India in 2022-23. Singh said the department would analyse the reasons for the contraction in FDI in five important sectors like computer hardware and software; construction, education, automobiles and metallurgical industries.

These five sectors had a share of $30 billion in India's total FDI in 2021-22 and in the last fiscal year, overseas inflows have almost halved. He added ‘Why exactly in those sectors (FDI) has come down is to be analysed. We will have to analyse.’  FDI equity inflows into India declined by 22 per cent to $46 billion in 2022-23. The investments during the January-March 2023 quarter plunged by 40.55 per cent to $9.28 billion.

He mentioned ‘I cannot think of any other reason. It is not as if our FDI policies have become protectionist. On the contrary, we have kept it very very liberal ... The decline is combination of hardening of interest rates along with geo-political risks going up around the world. In general the appetite may be less.’ Besides, he said that the government is doing investment promotion on a large scale and the inflows would start recovering.