Gujarat slips from top to sixth place among states in FDI inflow

This performance of Gujarat in attracting foreign investments declined eight times compared to the Rs 1,62,830 crore it attracted in 2020-’21, shows the latest figures from Department for Promotion of Industry and Internal Trade (DPITT), an arm of the Union Ministry of Commerce and Industry.

Karnataka topped the FDI list for year 2021-’22, attracting Rs 1,62,830 crore, followed by Maharashtra at Rs 1,14,964 crore. During the same period, Delhi received Rs 60,000 crore, followed by Tamil Nadu (Rs 22,396 crore) and Haryana (Rs 20,971 crore).

Among the top six states, only Gujarat and Maharashtra saw a decline in FDI inflow. All other states registered a growth with Karnataka registering a Rs 187 per cent growth, Delhi (50 per cent), Tamil Nadu (30per cent) and Haryana (67 per cent).

High Commissioner to Singapore Simon Wong told The Indian Express recently that continuity of a state government is high on the minds of investors as a change in regime can bring about a change in policies. With Gujarat expected to go for state assembly polls later in 2022, industry experts feel that investors confidence in the state remains unshaken.

“An investor outside India sees Gujarat as a stable state. Even when the political heads changed from Narendra Modi to Anandiben Patel, to Vijay Rupani and Bhupendra Patel, the policies have remained stable and the bureaucracy consistent,” said Anand Desai, Chairman of Confederation of Indian Industry (CII), Gujarat and MD of Anupam Rasayan India Ltd.

While Gujarat government officials could not be contacted for a reaction on the dip in FDI inflows, Sunil Parekh, co-chair of Gujarat State Office of FICCI said, “If you take 10 years’ average, Gujarat has been fourth or fifth among the states in FDI inflow. A lot of investments in Gujarat is domestic. So if you consider the total investments, Gujarat is doing very well, but its reliance on FDI is relatively smaller, compared to other states. It has not been a very attractive state for MNCs. For instance Japanese investments in India largely went to Gurgaon. When the Chinese investments came, they went to Chennai in a big way.”

Parekh said despite missing out on FDI, Gujarat has managed to attract huge domestic investments in pharmaceuticals and engineering sectors.