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Decline in FDI Inflows from Cayman Islands and Cyprus to India

Foreign Direct Investment (FDI) into India witnessed a substantial contraction from the Cayman Islands and Cyprus during April-September in the current fiscal year, contributing to an overall decline of 24% in FDI inflows.

Cayman Islands

  • FDI from the Cayman Islands experienced a sharp decline of 75%, plummeting from USD 582 million in the corresponding period of the previous fiscal year to USD 145 million in April-September of the current fiscal.

Cyprus

  • Inflows from Cyprus contracted significantly, registering a staggering drop of over 95% to USD 35 million during the six-month period. This stark decrease is compared to the USD 764 million recorded in April-September of the preceding fiscal year.

Contributing Factors:

  • Heightened Scrutiny: Experts attribute the drastic reduction in FDI from both the Cayman Islands and Cyprus to increased scrutiny of investment applications. This suggests a more rigorous evaluation process for foreign investments from these jurisdictions.

Overall FDI Scenario

  • The broader FDI scenario for India during April-September 2023-24 witnessed a 24% decline, totaling USD 20.48 billion. This dip was primarily driven by decreased inflows in sectors such as computer hardware and software, telecom, auto, and pharmaceuticals.

Important Questions Related to Exams

Q: What is the trend in FDI from the Cayman Islands and Cyprus to India during April-September 2023-24?

A: FDI from the Cayman Islands sees a 75% dip, while Cyprus experiences a staggering 95% contraction, contributing to an overall 24% decline in India’s FDI inflows.

Q: What factors are attributed to the sharp fall in FDI from these jurisdictions?

A: Experts attribute the decline to heightened scrutiny of applications, reflecting a more rigorous approval process for foreign investments from the Cayman Islands and Cyprus.

Q: How does the overall FDI scenario in India look during this period?

A: Overall FDI into India contracts by 24%, reaching USD 20.48 billion in April-September 2023-24, with notable decreases in key sectors like computer hardware, software, telecom, auto, and pharma.

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