As per the most recent data showed by the Department for Promotion of Industry and Internal Trade (DPIIT) , FDI in computer software , hardware sector had nearly lifted four-times to USD 24.4 billion between April-December 2020-21.
While in the previous year the data showed by DPIIT in the computer software and hardware sector was that the sector had earned USD 6.4 billion Foreign direct investment (FDI) and the entire 2019-20 saw overseas investment of USD 7.7 billion.
During the pandemic the work from home scenario had provided with a huge opportunity for the computer software and hardware sector as the pandemic accelerated the digitalisation and increased the use of artificial intelligence due to work from home scenario .This is what experts had said.
“There has been vast unlocking of value, and we have seen huge FDI into this sector,” Arvind Sharma, Partner, Shardul Amarchand Mangaldas & Co said.
Bimal Raj, Partner, Singhi Advisors,had also said that the sector witnessed an increase in FDI as there was a surge in the electronics and digital transformation at global level and the Indian tech firms were ideally poised to capture that potential.
Construction (infrastructure) activities (USD 7.2 billion), and pharmaceuticals (USD 1.24 billion) are the only other sectors which recorded growth in foreign inflows in the period of 9 months of the year 2020-21.
FDI in telecommunication crashes down to USD 357 million from USD 4.3 billion during April-December 2019-20. Automobile sector had also marked a slowdown with USD 1.18 billion during April-December 2020-21 as compared to USD 2.5 billion in the same period of the previous fiscal year.
The names of the various key sectors which have the possibilities to attract more foreign inflows are IT, telecom, pharma and electronics manufacturing,said by Sharma.
The focus of global investor had shifted to the IT and telecom sectors due to the increased use of high-end technology during this covid-19 pandemic .on the other hand , government continued its emphasis on Make in India and its introduction of performance linked incentive schemes for various sectors which also result in accelerated growth and more FDI inflow,” Sharma said.
Moving ahead , during April-December 2020-21, maximum FDI invested in India is from Singapore (USD 15.71 billion) followed by the US (USD 12.82 billion), the UAE (USD 3.91 billion), Mauritius (USD 3.47 billion), and Cayman Islands (USD 2.53 billion).
Overall we can say that FDI equity inflows in India jumped 40 per cent to USD 51.47 billion.