The foreign direct investment (FDI) inflows dipped in fiscal year 2023-24, contracting 3.49 per cent to $44.42 billion compared with the prior year, government data showed on Thursday. The decline comes after a stellar performance in FY22, when India raked in a record $84.83 billion in FDI inflows.

However, a glimmer of hope emerged with the first quarter of FY24 showing a promising 33.4 per cent year-on-year surge in FDI inflows to $12.38 billion, up from $9.28 billion. Overall FDI, encompassing equity inflows, reinvested earnings, and other forms of capital, witnessed a marginal decline of 1 per cent to $70.95 billion in FY24 compared with $71.35 billion in FY23.

The FDI equity inflows was driven by reduced investments in sectors such as services, computer hardware and software, telecom, automotive, and pharmaceuticals, according to government data.

FDI equity inflows had risen to $46.03 billion in 2022-23. Total FDI, which includes equity inflows, reinvested earnings, and other capital, decreased marginally by 1 per cent to $70.95 billion in 2023-24 from $71.35 billion in 2022-23.