During the calendar year 2021, India saw a six-fold increase in foreign direct investment (FDI) equity inflow, amounting to US$ 343.64 million, compared to the same period the previous year.
In the R&D sector, FDI is allowed on a 100% automatic route, subject to any applicable laws, rules, and security. Strong FDI inflows in the R&D sector are crucial for the growth of a knowledge-based economy, paving the way for higher economic growth.
In terms of FDI equity in R&D in 2021, Karnataka was the top recipient state. Telangana and Haryana were the next states after Karnataka. Flows into Karnataka increased by more than 250% in 2021 compared to 2020.
With a 40% share of the total FDI inflows, Singapore held the top spot among investors in the R&D sector in calendar year 2021. This was followed by Germany with a 35% share and the US with an 11% share.
These trends indicate a robust and growing R&D sector which would benefit the economy by driving innovation, increasing productivity, thereby leading to higher economic growth
