Page 347 - economic_survey_2021-2022

Services 321

FDI INFLOWS INTO SERVICES SECTOR
9.17 Services sector is the largest recipient of FDI inflows in India. According to the World
Investment Report 2021 by the UN Conference on Trade and Development (UNCTAD), India
was the fifth-largest recipient of Foreign Direct Investment (FDI) in 2020 improving its rank
by four places, from ninth position in 2019. In 2020-21, India registered highest ever annual
FDI inflows of US$ 81.97 billion. The country has received US$ 43.12 billion FDI inflows
in the first six months of 2021-22. FDI equity inflows, i.e., FDI inflows minus re-invested
earnings, were US$ 31.15 billion during April-September 2021, growing by 3.8 per cent over
the corresponding period last year.
9.18 During H1 2021-22, services sector received US$ 16.73 billion FDI equity inflows. This
is over 29 per cent lower than the FDI equity inflows into services in the corresponding period
last year. This fall was driven by Computer Software & Hardware sub-sector. In H1 2020-21,
FDI equity inflows into ‘Computer Software & Hardware’ sub-sector was US$ 17.55 billion.
It has declined by US$ 10 billion to reach US$ 7.12 billion in H1 2021-22. However, this is
still 77 per cent higher than the FDI equity inflows into this sub-sector during H1 2019-20. On
the other hand, ‘Financial, Business, Outsourcing, R&D, Courier, Tech Testing & Analysis’,
‘Education’ sub-sector witnessed strong inflows amounting to US$ 3.16 billion and US$ 2.25
billion respectively in April-September 2021. Nonetheless, the services sector still accounts for
over 50 per cent of the total FDI equity inflows into India during this period (Table 4).

Table 4: Gross FDI Equity Inflows into Services Sector

Share in Gross FDI (US$ Million)
Services Equity Inflows into
Sub-Sectors Services Sector in 2018-19 2019-20 2020-21 April- April- April-
2021-22 (per cent)* Sep 2019 Sep 2020 Sep 2021

Financial, Business, 18.84 9,158 7,854 5,060 4,455 2,252 3,152
Outsourcing, R&D,
Courier, Tech
Testing & Analysis
Computer Software 42.59 6,415 7,673 26,145 4,025 17,554 7,124
& Hardware
Trading 12.27 4,462 4,574 2,608 2,143 949 2,052
Telecommunications 2.25 2,668 4,445 392 4,280 7 376
Information & 0.54 1,252 823 314 196 161 91
Broadcasting
Hotel & Tourism 2.21 1,076 2,938 369 859 283 370

Hospitals & 1.97 1,045 635 501 376 163 329
Diagnostic Centers
Education 13.44 777 3,245 1,250 216 604 2,248
Retail Trading 1.38 443 472 1,338 243 1,230 231
Consultancy 0.91 411 1,047 938 473 110 153
Services
Sea Transport 2.22 279 199 294 173 144 372
Air Transport 1.14 191 918 204 114 97 190