FDI in India 2022:
Karnataka and Maharashtra were the highest FDI states in India during 2021-2022, according to the figures released by the Union government, recently
While Karnataka received 37.55 per cent of the FDI equity inflows in India, Maharashtra was a close second at 26.26.
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Singapore and the USA accounted for the highest inflows during this period with the former providing 27.01 per cent of the FDI equity inflows with the US at 17.94.
Close behind these countries were Mauritius at 15.98 per cent , Netherland :7.86 and and Switzerland with 7.31 per cent FDI.
Top 5 states with highest FDI Inflow during FY 2021-22
• Karnataka -37.55%
• Maharashtra -26.26%
• Delhi -13.93%
• Tamil Nadu – 5.10%
• Haryana- 4.76%
Karnataka’s advantages:
a)Karnataka is India’s largest software exporter.
b)It is India’s IT hub and home to the fourth largest technology cluster in the world.
c)Second largest chip design hub.
d)Fourth largest automobile producer
e)Fourth largest contributor to electronic industrial output
f)Leads in exports of readymade garments, gems and jewellery, petrochemicals and engineering goods from the southern region.
g) The state has vibrant automobile, agro, aerospace, textile & garment and heavy engineering industries.
Bengaluru, NFAPost: On the eve of his departure to the World Economic Summit at Davos, early this May, the visibly proud chief minister Basavaraj Bommai could not contain his pride while exclaiming that Karnataka had drawn the highest Foreign Direct Investment in the last quarter of 2021-22.
In fact, he said, “Karnataka has attracted the highest FDI in the last four quarters and this quarter as well.”
Significantly, this was in tune with India’s achievement as the country recorded the highest FDI at $83.57 billion for the financial year 2021-22.
Karnataka, in particular, has much to be proud about as its computer hardware and software sector alone bagged the highest share at 53 per cent, followed closely by Delhi and Maharashtra, respectively, at 17 per cent.
As a matter of fact , the state’s record in promoting investment can be the of envy of its counterparts , considering that it is also developing seven to eight additional airports.
This apart, Karnataka even signed two Memoranda of Understanding worth Rs 52000 crores at Davos with ReNew Power for Rs 50,000 crore and the Lulu Group International , accounting for the balance.
ReNew Power Pvt. Ltd, in particular, has signed an MoU for its project covering battery storage and green hydrogen unit, employing over 30,000 . In the same context, Hitachi Energy showed interest in putting up an EV charging infrastructure, renewable energy, and digitalisation projects.
Adding to the state’s enthusiasm is the fact that Siemens also agreed to take up two projects in the IT capital ,with focus on magnetic imaging and diagnostic, in addition to a health related research and development.
According to state officials, the government has assured special incentives for the company for the medical equipment production unit.
What helped matters is Bengaluru’s growth as a city of opportunity in sectors like space, defence and IT, with the state keen to be competitive.
Accordingly, the ongoing Global Investors Meet assumes importance as the state is already targeting ventures exceeding Rs 5 lakh crores,” evident from the confidence shown by industry minister, Murugesh Nirani.
The government appears determined to ensure that the MOUs are “ realised,” with emphasis on the future sectors like IT ,space and defence, among others. Proof of the government’s confidence was also evident from Nirani’s recent tweet , inviting Tesla to set up shop in Karnataka. The state is already a preferred investment destination for IT/BT, semiconductor and the electronic sector.
The state is also promoting itself as the premier hub of electronic vehicles in the coming years. This explains its proposal to house over 1000 StartUps in the EV sector.
The plan also envisages the development of five centres of excellence for imparting training, encouraging innovation, research and development, coupled with entrepreneurship.
Davos success
Reverting to Davos. Chief minister’s participation at the Davos meet further boosted the state’s image for being an attractive destination for FDI. This was clear during the interaction with newsmen in the city, after he returned from the World Economic Summit.
The state, he revealed, had succeeded in signing investment proposals exceeding Rs 60,000 crores in a host of sectors , evident from the agreements with several MNCs.
Predictably, he said , the development augured well for the GIM summit as investors were happy with the state’s policies , following their visible interest in its technology base coupled with the availability of human resources and allied environment.
The added impetus also came in the form of assurance by way of projects from companies like Hitachi Energy, Siemens, Ab Inbev, Dassault Systems, Nestle and ArcelorMittal.
Especially, as the government is also promoting its” Beyond Bengaluru “ programme, highlighting available opportunities in Tumakuru, Hubballi—Dharwad and Mysuru. Notably, proposals by Jubilant Food Works for a new centralised kitchen in a ten acre plot in Devanhalli ,became one of the highlights.
Likewise, Ab InBev proposes to set up a non-alcoholic beverages facility envisaging an investment of ₹50 crore , even as Nestle plans to expand and modernise its existing instant coffee unit in Nanjanagud with the investment being ₹700 crore.
Further, Dassault Systems is interested in putting up an electric vehicles modern production systems in association with CMTI, industrial training for students in digital 4.0 technology and Smart City projects.
Likewise, Schneider Electric is working on consolidating its facilities in Attibele to a single unit in Jigani , rasing the capacity to manufacture new models of data centre UPS and energy-efficient devices ,involving an investment of over ₹300 crore.
ArcelorMittal , on its part, plans a Rs 6000 crore solar-wind hybrid project ,with Bharti Enterprises looking at setting up a mega data centre in the state in addition to its existing units.
According to available information, leading investors including Adani , Dalmia Cement, Johnson Controls, Honeywell, IBM, Ikea Stores, PayPal, and Axis Bank ,too are interested in investing here.
Amid all this excitement, comes the news that the state government has received investment proposals exceeding Rs 1.74 lakh crore . The projects were cleared last week by the State High Level Clearance Committee.
The investment projects are expected to provide further push to industrial growth and generate direct and indirect employment opportunities in Karnataka, benefiting over 50,000.
It is also evident that for the state, green energy remains its future. This explains the encouragement to proposals for green hydrogen and ethanol production.
“In order to encourage green hydrogen production we have approved proposals from Acme Clean Tech Solutions Pvt. Ltd, JSW Green Hydrogen Ltd, Avada Ventures Pvt Ltd and Renew E-Fuels .
“We are happy that the state has received such a huge investment ahead of Global Investor’s Meet. This has indeed raised our expectations, “especially as it is the third largest sugarcane growing state in the country besides being the highest producer of ethanol,the chief minister added.
The major companies whose proposals were cleared include, ACME Cleantech Solutions Private Limited, Haryana;
Avaada Ventures Pvt Ltd, Mumbai ;
JSW GREEN HYDROGEN LIMITED, Ballari ;
ReNew E-Fuels Private Limited, Gurgaon;
Atria Power Holdings Pvt. Ltd., Bengaluru;
Kirloskar Ferrous Industries Ltd, Koppal ;
JSW NEO ENERGY LIMITED, Mumbai and
Continental Automotive Components (India) Pvt. Ltd, Bengaluru.
The FDI inflows in India had increased earlier to USD 81,973 million in FY 20-21 from USD 74,391 million in FY 19-20.
Top 5 sectors with highest FDI Equity Inflow in FY 2021-22
1. Computer Software & Hardware -24.60%
2. Services Sector (Insurance, Banking, Non Fin/Business, Outsourcing, R&D, Courier, Tech. Testing and Analysis) -12.13%
3. Automobile Industry -11.89%
4. Trading-7.72%
5. Construction (Infrastructure) Activities -5.52%
(Written by Tyagaraj Sharma)
