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Along with being a critical economic driver of economic growth, Foreign Direct Investment is a major source of non-debt financial resource for the economic development of the country. Foreign companies investing in India take advantage of relatively lower wages, special investment privileges such as tax exemptions, etc. The Indian government’s policy regime and robust business environment ensure the uninterrupted flow of capital into the country.
According to the Department of Industrial Policy and Promotion (DIPP), the total FDI investments in India in the months of April-June 2018 stood at USD 12.75 Billion. This proves that the government’s effort to improve the ease of doing business and relaxation in FDI is yielding results. As per a trade view released by The Commonwealth in 2018, India emerged as the top recipient of Greenfield FDI inflows from the Commonwealth.
Here is a list of the top countries that have invested in India and procured the benefits of the rapidly growing economy-

  • The United States of America– The U.S. is known to be India’s biggest believer, with around 1100 deals in the country. Lockheed Martin teamed up with Tata Advanced systems on its C-130 Hercules, considering opening a maintenance facility in the country. Coca-Cola announced its intention of investing $5 Billion over the next six years, two years ago. Following Indian Prime Minister, Narendra Modi’s speech, General Electric CEO, Jeffrey Immelt said that India was a great place to invest. Immelt said, “GE is a long-term investor in India. We look forward to more in the future.” The American multinational is investing $2 Billion in two new assembly plants in India. In the month of June, Cisco investments claimed that it is planning to invest $40 Million in the Indian start-ups. Ranging from FMCG to the Automobile sector, international business firms have acquired a major portion of the Indian economy.
  • Germany– German companies have 361 ongoing FDI deals in India. Volkswagen, the major German player in the automobile industry revealed its plans of investing upwards of $250 Million in India over the next five years. The ‘strategic partnership’ between India and Germany strengthened with the Intergovernmental Consultation (IGC) between the two governments that aim at increasing cooperation and identifying potential areas of investment. Indian exports from Germany increased from US$ 9.9 Billion in 2007-8 to US$ 11.5 Billion in 2016-17, accounting for 30.35 percent of India’s total imports from EU countries. The major investments in India from Germany are noticed in the sectors of transportation, electrical equipment, metallurgical industries, service sectors, chemicals, construction activity, trading, and automobiles.
  • United Kingdom– India had 380 FDI deals originating from the UK over the last year. One of the largest investment of the UK was made by Diageo at $1.9 Billion in order to take control of the United Breweries.
  • Italy– Italy has made 57 investments in India recently. Fiat Chrysler Automobiles, the world’s eighth largest automaker said that as part of a billion dollar investment in India, it plans to manufacture a premium sports utility vehicle under the Jeep brand and then export it to the U.K., Australia, and South Africa within the next two years.
  • Switzerland– Investments made by Switzerland in India reached 103 the last year, the majority of them being from the financial sector. Partners Group, the private investment firm in Switzerland having over $30 Billion under management worldwide, opened its first office in Mumbai in the month of May. Switzerland has accounted for a total of $2.4 Billion, which is 1% of the total FDI flow into India.
  • France– France has made 138 new Foreign Direct Investments in India. GDF Suez, the French multinational electric utility company continues to invest in power plants as a majority stakeholder.

The established giants have already drenched the Indian market, considering the continuously growing scopes and spaces for them to grow. India is a huge depository of skilled yet cheap labor. This makes it easy for foreign companies to optimize their production in India, thereby attracting the global firms to establish and/or expand their business in India.

[i] https://www.ibef.org/economy/foreign-direct-investment.aspx

[ii] https://www.forbes.com/pictures/hkgl45gk/no-7-switzerland/#3e3421173357

[iii] http://www.makeinindia.com/five-countries-that-are-making-big-in-india

[iv] https://ciiblog.in/india-germany-trade-and-investment-relations/

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