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The Reserve Bank of India (RBI) in its latest data on ‘the financial performance of non-government non-financial (NGNF) foreign direct investment (FDI) companies in India’ has showed that the net profit of FDI companies in India, or multinational companies, rose 45.2 per cent during 2022-23. Private limited FDI companies recorded higher profit growth as compared with public limited FDI companies. Besides, the report noted that services sector recorded higher profit growth when compared to the manufacturing sector.

According to the report, nearly half of the sample companies received direct investment from Singapore, Mauritius, and the USA. Japan, Netherland and United Kingdom were other major FDI source countries. It noted that a major chunk of the sample companies belonged to manufacturing, and information and communication sectors. The post-pandemic recovery in activities of firms consolidated further during 2022-23 and net sales of the sample companies rose by 21.1 per cent on top of 28.6 per cent growth in the previous year.

On the expenditure front, the RBI said that strengthening of economic activity resulted in 20.7 per cent growth in raw material expenses during 2022-23, while the operating expenses also rose by 20.7 per cent over and above 31.3 per cent increase in the previous year. Besides, manufacturing and services sectors witnessed a similar trend. The share of research and development (0.09 per cent) and royalty payment (1.11 per cent) in total expenditure of selected companies have come down marginally over the last two years.

Meanwhile, this data released by the RBI is based on audited annual accounts of 2,272 companies, which reported in the Indian Accounting Standards (Ind-AS) format for three accounting years from 2020-21 to 2022-23. Their economic sector classification is based on their principal business activity reported in MGT-7 form of the Ministry of Corporate Affairs, Government of India, which is the primary source of these data.