For the period between April-June 2024, the western Indian state of Maharashtra emerged as the preferred destination, amongst Indian states, for drawing Foreign Direct Investment (FDI). The western Indian state secured Rs.70,795 Crore in Q1. According to the Department for Promotion of Industry and Internal Trade, DPIIT (Government of India) Maharashtra secured over 50% of India’s total FDI.
Maharashtra’s Deputy CM (who also served as CM of the state from 2014-2019) Devendra Fadnavis tweeted: "In short, the total investment in the country during this quarter is Rs 1,34,959 crore, of which Rs 70,795 crore or 52.46 per cent alone is reported in Maharashtra,"
The news of Maharashtra being the leader in FDI comes at an important time, when the ruling Mahayuti government – an alliance of BJP, a breakaway faction of the Shiv Sena led by CM Eknath Shinde and a breakaway faction of the Nationalist Congress Party (NCP) has drawn flak on various fronts including projects being shifted out of the state (some of the prominent projects which have been moved out of Maharashtra are Vedanta-Foxconn and Tata-Airbus C 295).
Other states which are in the top 5 destinations, for the April-June 2024 period include – Karnataka (2), Gujarat (3), Delhi (4) and Tamil Nadu (5). States trying to woo FDI While Maharashtra may have emerged as number 1 amongst Indian states -- for the Q1 period of 2024 -- when Telangana, Karnataka and Tamil Nadu are pro-actively wooing investment. The Chairmanof Foxconn (a Taiwanese electronics giant) Young Liu, met with Chief Ministers of all three South Indian states. All three Chief Ministers pushed for further expansion of Foxconn operations in their respective states, while the Foxconn Chief himself underscored the fact that the company had ambitious plans for India.
While the Telangana CM, Revanth Reddy visited South Korea and US in August 2024, and signed Members of Understanding (MOU’s)with big US companies including Cognizant and Amazon and South Korean companies such as Hyundai motors. The Tamil Nadu CM MK Stalin embarked upon a two week visit to the US August 27, 2024- September 12, 2024)and interacted with the Tamil diaspora and potential investors. During his visit, MOU’s were signed with companies like Nokia, Paypal, Rockwell automation and Caterpillar.
While Tamil Nadu CM, MK Stalin was in the US for a visit to draw FDI for his state, a leader of the PMK, an opposition party of the Southern Indian state, Ambumani Ramadoss said:
"Tamil Nadu is in the 6th position in attracting foreign direct investments during the quarter that ended in June with Rs 8,325 crore. The state was in the fourth position earlier. This shows that the State is losing out in attracting investments”
It would be pertinent to point out, that states have been seeking to woo investors in several ways, many states have also been organising investors summits (several states including Assam and Rajasthan).
In conclusion, the recent figures highlight several points. First, certain states are at an advantage due to their geographical location as well as a relatively more pro-investment eco-system which has been created over a period of time.
Second, states are finding new ways to woo investors and are trying to focus on attracting more investment in specific areas – one focus area is technology.
Third, the outreach towards the diaspora, in recent decades, is not from an emotional prism, but also with an eye on making them stakeholders in drawing FDI in India.
Fourth, the states mentioned above along with several others need to be more pro-active in benefiting from what has been called the China+1 strategy (companies diversifying their operations beyond China).
Finally, it is important that the central government and states work more closely so that the country is successful in drawing more FDI and states can also benefit from the same.
The author is a policy analyst and faculty member at the Jindal School of International Affairs, OP Jindal Global University, Sonipat.
(Disclaimer: The views expressed above are the author's own and do not reflect those of DNA.)
