FDI inflow in R&D sector grows six-fold YoY to Rs 344 million in 2021

Karnataka attracted the most FDI in this space, followed by Telangana and Haryana. Flows into Karnataka were up more than 250% YoY

India witnessed a six-fold jump in foreign direct investment (FDI) equity inflow of $343.64 million in the Research and Development (R&D) during the calendar year 2021 as compared to the same period a year earlier.

FDI is permitted under 100 per cent automatic route in the R&D sector, subject to applicable laws, regulations, and  security. Robust FDI inflows in R&D space play an important role in the development of a knowledge-based economy, paving the way for higher economic growth.

According to data released by the industry department, Karnataka was the top FDI equity recipient state in R&D during 2021. Karnataka was followed by Telangana and Haryana. Flows into Karnataka were up more than 250 per cent in 2021 as compared to 2020.

Singapore was the largest investor in the investor in the R&D space during CY 2021 with a share of 40 per cent as compared to total inflows. The country was follower by Germany (35 per cent) and the United States (11 per cent).

“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 C.Y. 2020,” an official statement said.

Company-wise, Daimler Truck Innovation Center was the top FDI inflow recipient in R&D during 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 ).

“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,” the statement said.