Singapore became India’s top investor, despite 31.55% FDI drop

Singapore became India’s largest source of foreign direct investment (FDI), contributing US$ 11.77 billion despite a 31.55% drop in inflows in fiscal years 2023-24. Total FDI into India decreased by 3.49% to US$ 44.42 billion, while overall FDI fell by 1% to US$ 70.95 billion. The shift from Mauritius to Singapore as the preferred investment route followed the 2016 amendment to the India-Mauritius tax treaty. The United States ranked third with US$ 4.99 billion in investments. 

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Singapore became India’s largest source of foreign direct investment (FDI) in fiscal years 2023-24, despite a 31.55% drop in inflows to US$ 11.77 billion.

The total FDI, which includes equity inflows, reinvested earnings, and other capital equity inflows into India, fell to US$ 44.42 billion in 2023-24, down 3.49% from US$ 46.03 billion the previous year. Overall, FDI fell by 1%, to US$ 70.95 billion from US$ 71.35 billion.

Following the 2016 amendment to the India-Mauritius tax treaty, which reduced Mauritius’ attractiveness to investors, Singapore has emerged as the preferred jurisdiction for routing foreign capital into India. This shift is aided by Singapore’s favourable tax regime and status as a major financial hub. The United States was India’s third-largest investor, with US$ 4.99 billion in foreign investments, down from US$ 6 billion the previous fiscal year.

The Economic Survey 2023-24, tabled in Parliament by Finance Minister Nirmala Sitharaman, noted that Net FDI inflows to India fell from US$ 42.0 billion in FY23 to US$ 26.5 billion in FY24 as a result of the decline in global FDI flows. It added that gross FDI inflows fell only 0.6% from US$ 71.4 billion in FY23 to just under US$ 71 billion in FY24.