Investments by domestic companies abroad dipped by over 36 per cent to about $10.3 billion during 2009-10 compared the previous fiscal, with a large chunk of it going into the manufacturing sector, the Reserve Bank data showed on Tuesday.
During the 2008-09 fiscal, the amount of investment by domestic companies in overseas joint ventures and wholly-owned subsidiaries was over $16.2 billion.
The country's outward FDI showed a bigger decline of 52.7 per cent for the January-March quarter of FY10 at $1.9 billion, as against $4.1 billion over the same period of 2008-09.
"During 2009-10, the actual outward FDI in joint ventures and wholly-owned subsidiaries stood at $10.3 billion, which was 36.5 per cent lower than the investment made during the previous year," RBI said in its July bulletin.
While manufacturing accounted for 43.1 per cent of the total investments by domestic companies, finance, insurance real estate and business services attracted 28.1 per cent outward investment from the country.
The apex bank said during the past fiscal the share of equity in the total outward FDI financing decreased whereas the share of loans increased compared to 2008-09.
While equity (minus that of individuals and banks) accounted for over 64 per cent (over $6.6 billion) of the total outward FDI, loans accounted for about 35.6 per cent (over $3.6 billion). In 2008-09, the share of equity financing was 81 per cent and loans stood at 19 per cent.
In terms of destinations, Singapore, Mauritius, the Netherlands, the US and the British Virgin Islands accounted for 67 per cent of total outward FDI, with Singapore and Mauritius remaining top destinations, accounting for over 48 per cent of the investments during the period.
In fact, Singapore increased its share of investments from India to 35.5 per cent during the period, over 2008-09 when it accounted for 23.1 per cent share.
The Netherlands, on the other hand, witnessed a dip of 10 points to 7.2 per cent in the last fiscal as against 17.2 per cent in 2008-09 as the preferred destination.
The share of Mauritius remained constant at 12.8 per cent, while the US improved its share marginally from 5.7 per cent to 6.5 per cent.
