Which of the following States of India received the highest Foreign Direct Investment (FDI) equity flow during April to September 2022?
- AOption (a)
Gujarat
- BOption (b)
Karnataka
- COption (c)
Tripura
- DOption (d)
More than one of the above
- EOption (e)
None of the above
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Correct answer
Karnataka
Why this answer is correct
The correct answer is Karnataka.
Key Points
Foreign Direct Investment (FDI):
- A Foreign Direct Investment (FDI) is an investment made by a firm or individual in one country into business interests located in another country.
- FDI lets an investor purchase a direct business interest in a foreign country.
- Apart from being a critical driver of economic growth, FDI has been a major non-debt financial resource for the economic development of India.
- Components:
- Equity capital: It is the foreign direct investor’s purchase of shares of an enterprise in a country other than its own.
- Reinvested earnings: These comprise the direct investors’ share of earnings not distributed as dividends by affiliates, or earnings not remitted to the direct investor.
- According to the Department for Promotion of Industry and Internal Trade (DPIIT), India's cumulative FDI inflow stood at US$ 871.01 billion between April 2000-Sept 2022; this was mainly due to the government's efforts to improve the ease of doing business and relax FDI norms.
- The state that received the highest FDI during this period were:
- 1st - Karnataka at US$ 22.07 billion,
- 2nd - Maharashtra (US$ 15.43 billion),
- 3rd - Delhi (US$ 8.18 billion),
- 4th - Gujarat (US$ 2.70 billion) and
- 5th - Haryana (US$ 2.79 billion). Hence, option 2 is correct.