Page 129 - economic_survey_2021-2022

External Sector 103

Figure 14: Capital Account Balance and its ratio to GDP
a. Capital Account Balance and as percent of GDP b. Composition of Capital Account Balance

Net Capital A/c Bal Capital A/c to GDP -RHS Net Foreign Investment Net Loans
50 6 Net Banking Capital Net Other Capital (including RDS)

40 5 4 50 28.6 15.9 34.1 40.1
40
US$ Billion 30 3 2 Per cent of GDP US$ Billion 30 13.6 23.6 17.4 1.4 12.3 25.5
20
20
10
10 1 0
-10
0 0 -20
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2019-20 2020-21 2021-22 (P) 2019-20 2020-21 2021-22 (P)
Source: RBI
Note: RDS: Rupee Debt Service; P: Provisional
3.41 Foreign Investment, consisting of foreign direct investment (FDI) and foreign portfolio
investment (FPI), is the largest component of the capital account. Falling short of the pre-
pandemic level, the net foreign investment inflows (FIIs) – primarily driven by FDI – moderated
to US$ 25.4 billion in H1: FY 22 compared to corresponding period of FY 21.

3.42 The latest aggregate data on FDI is available till November 2021. While net FDI recorded
a lower inflow of US$ 24.7 billion, the gross FDI inflows moderated at US$ 54.1 billion during
April-November, 2021 compared to corresponding period last year, largely due to lower equity
investment. The quarterly movement may be seen at Figure 15.

Figure 15: Foreign Direct Investment

30 Net FDI Net FDI to GDP (RHS) 5
24.4
25 4

20 17.4 3
US$ Billion 15 14.0 7.3 9.7 12.0 11.7 9.5 2 Per cent of GDP

10

5 2.7 1

0 0
-0.5
-5 -1
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2019-20 2020-21 2021-22 (P)

Source: RBI
Note: P: Provisional
3.43 As far as sector-wise FDI inflows are concerned, computer software and hardware attracted
the highest FDI equity inflows of US$ 7.1 billion in April-September, 2021. Singapore continues