Singapore has emerged as the major source of foreign direct investment (FDI) into India for the second consecutive financial year, accounting for about 30 per cent of FDI inflows in 2019-20.
In the last financial year, India attracted $14.67 billion in FDI from Singapore, whereas it was $8.24 billion from Mauritius, according to the data of the Department for Promotion of Industry and Internal Trade (DPIIT).
In 2018-19, Singapore’s FDI aggregated at $16.22 billion, while that from Mauritius it was $8.08 billion.
Singapore has been able to outpace Mauritius with its ease of doing business policies, simplified tax regime and a large number of private investors.
Attractive corporate tax rates, swift response in combating the COVID-19 pandemic, impressive mobile and internet penetration, and technology uptake are making India a primary destination to invest. While countries are battling the COVID-19 pandemic and the world economy is headed into recession, India received a huge investment from stake sale of Jio Platforms. Many Economists and investors are now closely watching India as it is headed towards becoming a digital giant.
Foreign investments are considered crucial for India as it needs huge investments for overhauling the infrastructure sector such as ports, airports and highways to boost growth.
FDI helps in improving the country’s balance of payments and strengthen the rupee value against other global currencies, especially the US dollar.