Karnataka attracts third highest FDI equity inflows at $7.6 b in FY21

Karnataka has remained the third-largest recipient of FDI equity inflows in the country despite the Covid-19 pandemic causing huge disruption in the economic activities in the fiscal ended March 2021.

The state has attracted $7.67 billion (Rs 56,884 crore) worth of foreign direct investment (FDI) inflows for the year 2020-21, a growth of 78.8 per cent over the previous year. In 2019-20, Karnataka had received $4.28 billion (Rs 30,746 crore).

Gujarat with an FDI inflow of $21.89 billion stood in first place during the fiscal and followed by Maharashtra in second place with an inflow of $16.17 billion, according to data available with the Reserve Bank of India (RBI).

For two consecutive fiscals, Karnataka has stood in third place in terms of FDI equity inflows. With a cumulative inflow of $11.95 billion (Rs 87,631 crore) between October 2019 and March 2021, Karnataka's share in the national FDI inflows stood at 14 per cent. The country as a whole received $81.72 billion worth of FDI equity inflows during the fiscal ended March 2021.

Read | Gujarat receives FDI of $30.23 billion during FY21; highest in country

Karnataka is followed by Delhi with an inflow of $5.47 billion and Tamil Nadu with an inflow of $2.32 billion in the next two places respectively.

“The government of Karnataka is actively working towards attracting more FDI to the state focused on manufacturing with two key levers: Connecting with more and more multinational companies via multiple channels, and strengthening the state’s proposition to investors via policy measures,” Raj Kumar Khatri, additional chief secretary, department of commerce and industries, the government of Karnataka told DH.

He said updated policies for new-age sectors such as electronics, electric vehicles, and increasing affordability and availability of land have helped the state to secure more investment. The state government is also planning to organise webinars with country trade associations, industry bodies, and outreach programmes for MNCs with investment plans in India in the coming days to attract more investment.

“The absence of trading activities and stock markets in Karnataka are some of the reasons why we have not received higher investments compared to Gujarat and Maharashtra. Otherwise, we are number one in attracting investments in the IT, ITeS, and manufacturing sectors,” Khatri added.