FDI into India reaches US$114.4 billion from 2015-2017, says KPMG report
Source: Pan Asian Media , Author: Posted by BI-ME staff
Posted: Mon October 30, 2017 12:51 pm

UAE. Cumulative foreign direct investment (FDI) equity flow into India reached US$114.4 billion (Dh420 billion) during the last two financial years – 2015-16 to 2016-16, according to the latest report by global accounting firm KPMG, prepared for the first India-UAE Partnership Summit (IUPS) held at the Armani Hotel, Dubai from October 30-31, 2017.
 
This is about 40 per cent higher than the US$81.8 billion (Dh300 billion) recorded in the preceding three years, from 2011-12 to 2013-14.

KPMG report Highlights:

1.     Cumulative FDI into India reaches US$498.9 billion in 17 years from April 2000 to June 2017
 
2.     FDI inflow into India hits US$114.4 billion in 2015-17 financial year, DIPP report shows
 
3.     India received highest FDI flow to US43.5 billion in 2016-17
 
4.     UAE investors announced US$2.5 billion in October 2017
 
UAE investors announced US$2.5 billion worth of investments in to India in a single month – October 2017 – including US$1 billion (Dh3.67 billion) investment by Abu Dhabi Investment Authority (ADIA), US$1 billion (Dh3.67 billion) by NRI-Emirati Investor’s Group and a further Dh1.7 billion investment by Lulu Group in Andhra Pradesh.
 
Cumulative FDI into India reached US$498.9 billion in 17 years from April 2000 to June 2017, according to the Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce, India.
 
“In the financial year 2016-17, the country received the highest-ever FDI flow worth US$43.5 billion (Dh160 billion),” KPMG said in its report.

“India also witnessed an increase in private equity/venture capital investments led by its growing start-up segment. Between January and September 2017, India received US$17.6 billion of private equity/venture capital spread across 402 deals.
 
The International Monetary Fund (IMF) has pegged India’s economic growth projections at 7.2 per cent for the current financial year, 2017-18 and it is likely to increase to 7.7 per cent in 2018-19. Higher infrastructure spending will play a vital role in achieving overall economic growth, the IMF said.
 
The report – released at the IUPS, organised by the Business Leaders Forum (BLF) and commissioned by KPMG headed by Vikas Papriwal, Partner and Head of Markets, KPMG in the Lower Gulf and Middle East South Asia – comes at the backdrop of the latest announcement of US$1 billion by the newly formed NRI-Emirati Investors’ Group in addition to a further US$1 billion by Abu Dhabi Investment Authority (ADIA), one of the world’s top three sovereign wealth funds (SWFs).
 
“Furthermore, SWFs holdings crossed 10 per cent share in the total Foreign Portfolio Investor (FPI) assets in India, as of May 2016. In the equity market, its holdings reached US$33.7 billion, while they accumulated US$5.1 billion across debt instruments,” Vikas Papriwal, Partner and Head of Markets, KPMG in the Lower Gulf and Middle East South Asia, says.
 
“Furthermore, SWFs holdings crossed 10 per cent share in the total Foreign Portfolio Investor (FPI) assets in India, as of May 2016. In the equity market, its holdings reached US$33.7 billion, while they accumulated US$5.1 billion across debt instruments.”
 
Asian Development Bank (ADB) said the infrastructure sector in India requires US$5.2 trillion (Dh19.1 trillion) worth of investments to sustain the economic growth and lend support to several government flagship programmes.
 
“The infrastructure sector is one of the key drivers of the Indian economy. India's infrastructure market, currently the third-largest in Asia, is anticipated to reach US$6.6 trillion by 2025, constituting 12.5 per cent of the Asia-Pacific region.  As of 2016, the sector contributes nearly 8 per cent to India’s GDP,” said the report.
 
Roadways and highways are key to the development of the infrastructure sector as they offer the required base for intra- and inter-state connectivity. The government has been trying to provide the necessary impetus to boost up the sector.
 
In the federal budget 2017–18, the government has allocated US$9.8 billion for national highways (an increase of 11 per cent from the previous year). The states are expected to provide an additional US$1.2 billion for road development. In addition, the government has also announced the construction of 2,000km coastal connectivity roads.
 
The country is witnessing increased investments into the sector on the back of reforms and higher budgetary allocation by the government, greater funding support from international lending institutions and several MoUs being signed with several countries.
 
In the federal budget 2017–18, the total capital and development expenditure of railways has been estimated at US$20 billion, which includes US$8.4 billion provided by the government.
 
The report was released in the presence of HE Mr Sultan bin Saeed Al Mansouri, UAE Minister of Economy and HE Mr Abdullah Al Nuaimi, UAE Minister of Infrastructure Development and HE Mr Mohammed Sharaf, Assistant Minister for International Cooperation, UAE, and more than 800 VIP delegates including senior government officials and business leaders at the inaugural edition of the IUPS.
 
“The report highlights the economic and investment landscape of India and the opportunities lying in front of the investors,” Mr Vipul, Consul General of India, says.
 
“We would urge the investors and businesses in the UAE to look at the huge opportunities and the talent pool in India and become part of one of the biggest economic growth stories and take advantage of the opportunities.
 
“The recent legal and financial sector reforms haves made the Indian economy more agile and transparent and our government is determined to create a more enabling environment where foreign investment creates a win-win situation for all – Indian economy, investors, local businesses and human resources – in terms of job and value creation.”
 
The report issued by KPMG on behalf of the IUPS, was commissioned by the Business Leaders Forum (BLF), organiser of the IUPS.
 
Dr Azad Moopen, President of the BLF, says, “We are passing through an exciting time in our history and our lives where we are witnessing a new era in the economic growth of India as well as the India-UAE relationship and investment landscape.
 
“The KPMG report sheds a greater light on the India-UAE investment corridor and is an eye-opener for all of us. It shows the potential areas of greater collaboration and investment and how it will help the Indian economy to grow fast.”
 
The UAE is the 10th largest FDI source market for India with cumulative FDI reaching US$4.76 billion in the last 17 years from April 2000 till March 2017.
 
Invest India, the foreign investment promotion body of India, said it will attract US$100 billion foreign investment in the country, of which US$85 billion has already been committed by 600 large businesses that will create 700,000 jobs, according to recent reports.
 
FDI inflows into the country grew 8 per cent and touched a new high of $60.08 billion in 2016-17, according to Department of Industrial Policy and Promotion (DIPP). Cumulative FDI inflow from April 2000 till March 2017 reached US$484.35 billion.
 
The high-level and high-powered IUPS is split into a number of brainstorming business sessions and panel discussions on hot topics, including Investment Implementation, Infrastructure and Tourism while ministers of two Indian states – Uttar Pradesh and Telengana – will present investment opportunities in key projects within the states and seek investment from potential partners in the UAE.
 
Sudesh Aggarwal, Board Member of the BLF, Chairman of the IUPS Organising Committee and Chairman of India Trade and Exhibition Centre (ITEC), says, “The report by our knowledge partner KPMG shows that the bilateral trade between the two countries is expected to cross the US$100 billion mark by 2020, from the current levels of US$53 billion in FY17, there is an expectation that both the countries will realise a closer economic partnership.
 
“India has emerged as one of the leading investment destinations for UAE-based firms, as it received US$1.2 billion FDI flows from the UAE in 2016, forming almost 90 per cent of the total investments received from the countries of the GCC.”
 
The Summit – with a theme of Investment Implementation – will deliberate about how important projects in India could be financed and executed with the participation of the local business houses of UAE. It will also review the trade and investment relations between the two countries in light of the Joint Statement adopted by the two sides during the visit of H.H. Sheikh Mohammed bin Zayed Al Nahyan in January 2017.
 
This is the only business conference of its kind to be pro-actively supported by the Government of India through the Embassy of India, Abu Dhabi and Consulate General of India, Dubai as well as the UAE Ministry of Economy. IUPS is also the only such bilateral summit where Ministers of Government of India as well as UAE will be participating.
     
Business Leaders Forum (BLF) was formally launched in March 2017 and has been set up under the direct guidance of the UAE Ministry of Economy, Embassy of India and Consulate General of India with India Trade & Exhibition Centre (ITEC) acting as the official Secretariat of BLF.
 
The IUPS is being sponsored by NRI-Emirati Investors Group, NMC, Mulk Holdings, Nikai Group, UAE Exchange, GRP Industries, Sharjah Investment and Development Authority (Shurooq), ITL Cosmos, Zulekha Hospital, and supported by UAE-India Business Council (UIBC), UAE International Investors’ Council (UIIC), Association of Indian Chambers (Assocham), Invest India as well as other stakeholders.
 
India-UAE Partnership Forum is supported by knowledge partner namely KPMG – the global accounting and auditing firm, Gulf News –The Official Newspaper, Forbes Middle East - The official business magazine & Sony TV and Times Now television channels.

Photo Caption: Vikas Papriwal, Partner and Head of Markets, KPMG in the Lower Gulf and Middle East South Asia

 

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