India Attracts $343.64 Million FDI Equity Inflow In R&D Sector In 2021; Karnataka Top Recipient State

India attracted $343.64 million FDI (Foreign Direct Investment) equity inflow in research and development (R&D) during calendar year (CY) 2021, which is 516 per cent higher as compared to CY 2020, an official release said on Tuesday (19 July).

The FDI is permitted under 100 per cent automatic route in R&D sector subject to applicable laws/regulations, security and other conditionalities.

Karnataka is the top FDI equity recipient state in R&D during CY 2021 followed by Telangana and Haryana, the Commerce Ministry said in a release.

Telangana, Karnataka, Haryana, Andhra Pradesh and Tamil Nadu are the five states that showed growth of more than 250 per cent, compared to previous CY, in FDI equity inflow in R&D during CY 2021, the ministry said.

Singapore is the top investing country in R&D with 40 per cent share of total FDI equity in the sector, followed by Germany (35 per cent) and USA (11 per cent), according to the ministry.

Further, FDI Equity inflow from several countries like Germany, Mauritius, France, Singapore, Oman and US showed an increase of more than 200 per cent as compared to previous CY 2020.

Daimler Truck Innovation Center was the top FDI Equity inflow recipient company in R&D during CY 2021 with 35 per cent share of total FDI Equity in R&D followed by Aragen Life Sciences Private Limited (34 per cent) and Stelis Biopharma Private Limited (21 per cent).

The ministry said that 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.

Research and Development (R&D) plays an important role in the development of a knowledge-based economy that can pave the way for higher economic growth, the ministry said.

The FDI infuses long term sustainable capital in the economy and contributes towards technology transfer, development of strategic sectors, greater innovation, competition and employment creation amongst other benefits, it added.

The ministry said that the government is continuously endeavouring to attract and promote R&D intensive FDI in order to supplement domestic capital, technology and skills for accelerated economic growth and development.