Sectorwise Analysis of FDI Inflow in India

Abstract:



The Sectorwise Analysis of FDI Inflow in India reveals that maximum FDI has taken place in the service sector including the telecommunication, information technology, travel and many others. The service sector is followed by the manufacturing sector in terms of FDI. High volumes of FDI take place in electronics and hardware, automobiles, pharmaceuticals, cement, metallurgical and other manufacturing industries.

Sectorwise Analysis of FDI Inflow in India-Glimpses



The IT industry is one of the booming sectors in India. At present India is the leading country pertaining to the IT industry in the Asia -Pacific region. With more international companies entering the industry, the Foreign Direct Investments in India has been phenomenon over the year. The rapid development of the telecommunication sector was due to the FDI inflows in form of international players entering the market and transfer of advanced technologies. The telecom industry is one of the fastest growing industries in India. With a growth rate of 45%, Indian telecom industry has the highest growth rate in the world.

Top 10 Sectors Attracting Highest FDI Equity Inflows:

Ranks Sector 2009-10 (April-March) 2010-11 ( April- March) 2011-12 (April- Jan.) Cumulative Inflows (April ‟00 - Jan. ‟12) % age to total Inflows (In terms of US$)
1SERVICES SECTOR (financial & non-financial) 19,945 (4,176) 15,053 (3,296) 22,771 (4,836) 143,878 (31,971) 20.00%
2TELECOMMUNICATIONS (radio paging, cellular mobile, basic telephone services) 12,270 (2,539) 7,542 (1,665) 8,984 (1,992) 57,050 (12,547) 8.00%
3COMPUTER SOFTWARE & HARDWARE 4,127 (872) 3,551 (780) 3,312 (698) 49,626 (11,107) 7.00%
4HOUSING & REAL ESTATE 14,027 (2,935) 5,600 (1,227) 2,750 (591) 49,025 (10,973) 7.00%
5CONSTRUCTION ACTIVITIES (including roads & highways) 13,469 (2,852) 4,979 (1,103) 10,859 (2,230) 49,440 (10,867) 7.00%
6DRUGS & PHARMACEUTICALS 1,006 (213) 961 (209) 14,482 (3,208) 42,745 (9,170) 6.00%
6POWER 6,138 (1,272) 5,796 (1,272) 7,262 (1,569) 32,798 (7,215) 5.00%
7AUTOMOBILE INDUSTRY 5,893 (1,236) 5,864 (1,299) 2,916 (635) 29,354 (6,470) 4.00%
8METALLURGICAL INDUSTRIES 1,999 (420) 5,023 (1,098) 7,700 (1,655) 26,287 (5,909) 4.00%
10PETROLEUM & NATURAL GAS 1,297 (266) 2,543 (556) 951 (202) 14,612 (3,339) 2.00%

Note:

(i) Cumulative Sector- wise FDI equity inflows (from April 2000 to January 2012) - Annex-'B'.
(ii) FDI Sectoral data has been revalidated in line with that of RBI, which reflects minor changes in the FDI figures (increase/decrease) as compared to the earlier published sectoral data.
(iii)Source:-http://dipp.nic.in

Sector-Wise FDI Inflows From April 2000 To January 2012.

S.No Sector Amount of FDI Inflows %age with total FDI Inflows (+)
  (In Rs crore) (In US$ million)  
1SERVICES SECTOR 143878.4431970.8519.99
2TELECOMMUNICATIONS 57049.9512546.547.84
3COMPUTER SOFTWARE & HARDWARE 49626.4511106.56.94
4HOUSING & REAL ESTATE (INCLUDING CINEPLEX,MULTIPLEX, INTEGRATED TOWNSHIPS & COMMERCIAL COMPLEXES ETC.) 49024.5810972.676.86
5CONSTRUCTION ACTIVITIES 49440.1810867.246.79
6DRUGS & PHARMACEUTICALS 42745.269170.245.73
7POWER 32798.257214.834.51
8AUTOMOBILE INDUSTRY 29354.316469.534.04
9METALLURGICAL INDUSTRIES 26287.485909.423.69
10PETROLEUM & NATURAL GAS 14611.843338.752.09
11CHEMICALS (OTHER THAN FERTILIZERS) 14703.353244.932.03
12HOTEL & TOURISM 14770.583229.482.02
13TRADING 14131.093126.531.95
14ELECTRICAL EQUIPMENTS 12902.142844.751.78
15INFORMATION & BROADCASTING (INCLUDING PRINT MEDIA) 12062.22632.881.65
16CEMENT AND GYPSUM PRODUCTS 11324.882535.431.58
17MISCELLANEOUS MECHANICAL & ENGINEERING INDUSTRIES 9787.162180.261.36
18CONSULTANCY SERVICES 8772.221924.541.2
19INDUSTRIAL MACHINERY 7590.941664.261.04
20PORTS 6717.371635.081.02
21AGRICULTURE SERVICES 6912.481445.370.9
22FOOD PROCESSING INDUSTRIES 6324.111376.990.86
23NON-CONVENTIONAL ENERGY 6142.371324.220.83
24HOSPITAL & DIAGNOSTIC CENTRES 5252.561183.040.74
25ELECTRONICS 5214.61151.070.72
26TEXTILES (INCLUDING DYED,PRINTED) 5036.271104.540.69
27SEA TRANSPORT 4992.351100.780.69
28FERMENTATION INDUSTRIES 4480.651022.150.64
29MINING 4042.33937.90.59
30PAPER AND PULP (INCLUDING PAPER PRODUCTS) 3554.227640.48
31PRIME MOVER (OTHER THAN ELECTRICAL GENERATORS) 2801.95599.130.37
32MEDICAL AND SURGICAL APPLIANCES 2421.14514.080.32
33CERAMICS 2171.84503.790.31
34EDUCATION 2306.13491.990.31
35RUBBER GOODS 2124.88454.470.28
36AIR TRANSPORT (INCLUDING AIR FREIGHT) 1924.46431.20.27
37MACHINE TOOLS 1950.99428.940.27
38SOAPS, COSMETICS & TOILET PREPARATIONS 1934411.340.26
39DIAMOND,GOLD ORNAMENTS 1505.37334.310.21
40VEGETABLE OILS AND VANASPATI 1300.77276.560.17
41FERTILIZERS 1196.78255.350.16
42PRINTING OF BOOKS (INCLUDING LITHO PRINTING INDUSTRY) 1110.39244.280.15
43RAILWAY RELATED COMPONENTS 1058.18234.760.15
44COMMERCIAL, OFFICE & HOUSEHOLD EQUIPMENTS 1026.7225.850.14
45AGRICULTURAL MACHINERY 903.7200.320.13
46GLASS 806176.20.11
47EARTH-MOVING MACHINERY 728.9167.330.1
48TEA AND COFFEE (PROCESSING & WAREHOUSING COFFEE & RUBBER) 451.11100.260.06
49PHOTOGRAPHIC RAW FILM AND PAPER 269.2666.540.04
50INDUSTRIAL INSTRUMENTS 304.2665.950.04
51LEATHER,LEATHER GOODS AND PICKERS 267.959.60.04
52RETAIL TRADING (SINGLE BRAND) 204.0744.450.03
53BOILERS AND STEAM GENERATING PLANTS 201.8641.770.03
54SUGAR 174.6439.560.02
55TIMBER PRODUCTS 173.5636.170.02
56COAL PRODUCTION 103.1124.780.02
57SCIENTIFIC INSTRUMENTS 96.7821.210.01
58DYE-STUFFS 84.86190.01
59GLUE AND GELATIN 70.5614.550.01
60DEFENCE INDUSTRIES 17.683.720
61COIR 9.562.020
62MATHEMATICAL,SURVEYING AND DRAWING INSTRUMENTS 5.051.270
63MISCELLANEOUS INDUSTRIES 33596.677487.614.68
SUB. TOTAL  722833.7159973.12 
64RBI’S- NRI SCHEMES (2000-2002) 533.06121.33-
GRAND TOTAL  723366.76160094.45-

The FDI in Automobile Industry has experienced huge growth in the past few years. The increase in the demand for cars and other vehicles is powered by the increase in the levels of disposable income in India. The options have increased with quality products from foreign car manufacturers. The introduction of tailor made finance schemes, easy repayment schemes has also helped the growth of the automobile sector. For the past few years the Indian Pharmaceutical Industry is performing very well. The varied functions such as contract research and manufacturing, clinical research, research and development pertaining to vaccines are the strengths of the Pharma Industry in India. Multinational pharmaceutical corporations outsource these activities and help the growth of the sector. The Indian Pharmaceutical Industry has been experiencing a vast inflow of FDI.

The FDI inflow in the Cement Industry in India has increased with some of the Indian cement giants merging with major cement manufacturers in the world such Holcim, Heidelberg, Italcementi, Lafarge, etc. The FDI in Semiconductor sector in India were crucial for the development of the IT and the ITES sector in India. Electronic hardware is the major component of several industries such as information technology, telecommunication, automobiles, electronic appliances and special medical equipments.

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Last Updated on 4/13/2012