India is the top recipient of foreign direct investment from Singapore in the fiscal year 2023-24, with Mauritius being the second largest investor

In 2023-24, India experienced Singapore becoming the leading provider of foreign direct investment (FDI) with $11.77 billion in total inflows, despite a 31.55% decrease from the previous year. The most recent government data shows that India experienced a 3.5% decrease in total FDI inflows due to global economic uncertainties.

During the previous financial year, there was a decline in FDI equity inflows from key nations including Mauritius, Singapore, the US, the UK, UAE, Cayman Islands, Germany, and Cyprus. Nonetheless, a report by PTI indicated a significant rise in investments from the Netherlands and Japan, indicating a change in investment trends.

India is the second largest contributor to Foreign Direct Investment (FDI). Mauritius kept its position as the second-largest investor with $7.97 billion, while the US placed third with $4.99 billion. This represents a drop from $6 billion in the US from the year before.

Rumki Majumdar, who works as an economist at Deloitte India, pointed out that Singapore being a global financial hub along with regulatory changes in India like revisions to the REIT Regulations 2014, have opened up fresh investment prospects. She expects an increase in foreign direct investment in the second half of 2024-25. He also stated that due to India's recent efforts, such as SEBI amendments to the REIT Regulations 2014, there are now more investment opportunities for investors in Singapore, leading to increased FDI from Singapore to India.

As per reports, Anindya Ghosh, Partner at INDUSLAW, highlighted the significance of India's 2016 tax treaty revision with Mauritius, which decreased its attractiveness as a destination for investments. He highlighted how Singapore's regional headquarters and holding companies help channel investments into India.

Foreign Direct Investment (FDI) equity inflows saw a decrease of 3.49 percent to $44.42 billion during 2023-24, a drop from $46.03 billion in 2022-23. Overall foreign direct investment (FDI), including investments in stocks, reinvested profits, and other forms of capital, experienced a minimal 1% drop to $70.95 billion from $71.35 billion in the prior financial year.

Between April 2000 and March 2024, Mauritius made up 25 percent of India's overall FDI, followed closely by Singapore at 24 percent. During this period, the US accounted for 10 % of the total foreign investments.

Foreign investments play a crucial role in India's efforts to improve infrastructure and promote economic growth, thus helping to strengthen the balance of payments and stabilize the rupee's value of other currencies worldwide.