In the fiscal year ended March 2021, net foreign direct investment (FDI) into the country reached a new high of $43.366 billion, surpassing the previous high of $43.013 billion set in the previous fiscal year. FDI saw a major boost from stake sales by Reliance Industries (RIL) group firms, which raised about $35 billion during the fiscal year, despite the fact that it was a Covid-hit year.
According to data released by the Reserve Bank of India (RBI), direct investment into India totaled $54.665 billion in FY21, while FDI into India totaled $11.299 billion, resulting in a net FDI of $43.336 billion.
The selling of stakes by RIL group companies to Facebook, Google, and a host of other global investors boosted FDI flows significantly in India.
During the year, the group raised more than $35 billion by selling stakes in Jio Platforms and Reliance Retail, accounting for more than 64% of total FDI earned by India.
Aside from FDI, international portfolio investments have increased significantly. FPI inflows into debt and equities totaled $36.18 billion in the year ended March 2021. It was only second to the $45.6 billion in total FPI flows earned in fiscal 2014-15. FPI inflows into equities, on the other hand, reached a new peak of $37 billion this year.
The heavy inflow of FDI and capital from foreign portfolio investors (FPIs) resulted in a substantial increase in forex reserves. The foreign exchange — or forex — reserves increased by more than $100 billion in the fiscal year ended March 2021, reaching $576.8 billion as of the week ended April 2, 2021.