M B Patil, the Large and Medium Industries Minister of Karnataka, has said that the faulty policies and lack of vision of the Union government has led to a reduction in the flow of foreign direct investment into the State. He further added that global developments also might have contributed to this.
“The data released by the Central Government reflect the declining trend in FDI to India. The decline in FDI is not just limited to Karnataka,” the minister noted. He further questioned, “Who is responsible for the decrease in overall FDI to India in the last three years?”
The FDI to India has decreased from $71 billion in FY23 to $70 billion in FY24. The FDI which stood at ₹4.42-lakh crore in FY21-22 reduced to ₹3.67-lakh crore in FY22-23, ₹3.427-lakh crore in FY23-24, Patil stated. The FDI equity investment in FY23-24 has seen a reduction of just 3 per cent as compared to the previous year. However, this fall is over 25 per cent as compared to the previous four years, he further added.
He claimed that “The NDA government’s stand and laxity of previous BJP-led government in the state have also contributed to FDI decline in the state. The union government is diverting the investors towards Maharashtra and Gujarat.”
“Despite many challenges and adverse geopolitical conditions, Karnataka has attracted investments worth ₹1.13-lakh crore in 2023-24 across various sectors of ESDM, Li-ion battery manufacturing for EVs (Electric Vehicles), core manufacturing (steel), automobiles, data centres, among many others. The manufacturing sector has shown promising momentum,” he added.
The Central Government has been focusing on local assembling industries in the manufacturing sector. However, such industries need to depend on foreign countries for their operations. The hurdles in supplying components from foreign countries and tax norms have negatively impacted these industries resulting in decrease in FDI. The Central Government should consider experts’ opinions to resolve such issues, Patil opined.
(With inputs from BL intern Nivasini Azhagappan)