Summary:

Foreign direct investment (FDI) increased by 47.8% to $16.17 billion during April-June 2024. Higher growth expectations are driven by a potential Federal Reserve rate cut, modest US growth, and favorable conditions in India. Diversified sectors, such as power, construction, and healthcare, are gaining popularity.

High FDI is expected to continue, supported by upcoming US election results, a potential Fed rate drop, and India's strong economic outlook. Despite the growth in FDI inflows compared to last year, they are recovering from a notably low preceding quarter. Contributing factors include constraints on investor dry powder, strong performance in Indian markets, and favorable FDI policy reforms, such as allowing 100% automatic route investment in space. Total FDI grew by 28% to $22.49 billion this quarter.

Source: IBEF

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