Foreign direct investment (FDI) inflows to India are expected to gain further momentum and net FDI inflows to the country could cross $30 billion mark this fiscal year driven by improved investor sentiment, Nomura has said in a report.
According to the Japanese brokerage firm, net FDI inflows is on track to top $30 billion and this would reduce India’s external sector vulnerability.
Net FDI into India rose sharply to $11.5 billion in the first four months of FY15 (April-July) from $8.4 billion over the same period in FY14, the report said.
“Based on the current run rate, we estimate that net FDI inflows could rise above $30 billion in FY15 (amounting to 1.4 per cent of GDP),” Nomura said in a research note.
In 2013-14, FDI inflows in India were $24.29 billion against $22.42 billion in 2012-13.
Citing the various factors that are likely to boost FDI inflows, the brokerage said, “Investor sentiment has improved, domestic confidence has revived, growth is on a recovery path and the government is focused on improving the ease of doing business.”
Sector wise, telecom, pharma, and financial and business services were the largest recipients over the first three months of this fiscal year.
“In our view, the large inflow in July could be partly due to fund-raising in the e-commerce sector,” it added.
According to official data, FDI flows to India surged about 34 per cent to $1.92 billion in June.