Singapore tops India’s outbound investment

In a significant revelation, the Reserve Bank of India (RBI) has unveiled data showcasing a robust surge in outward direct investment (ODI) by Indian firms during the financial year 2023. This remarkable increase, amounting to a staggering 19.46%, saw Indian companies channel a total of ₹9.11 lakh crore ($109 billion) into overseas ventures, compared to ₹7.62 lakh crore in the preceding fiscal year. This surge signals a growing global footprint for Indian enterprises.

Leading the charge among the beneficiaries of Indian ODI is Singapore, emerging as the largest recipient with an infusion of ₹2.03 lakh crore ($24.48 billion). This remarkable figure accounts for a substantial 22.3% of the total ODI during FY2023, underscoring the allure of Singapore as a prime destination for Indian investment.

Notably, the United States secured a significant share of ₹1.24 lakh crore (13.6%), reaffirming its position as a favoured investment location for Indian firms. Meanwhile, the United Kingdom attracted ₹1.16 lakh crore (12.8%) of ODI from India during the same fiscal year.

The top ten recipient countries collectively absorbed a substantial 85% of the total ODI, reflecting the concentration of Indian investments in these nations. Switzerland, known for its financial stability and global connectivity, received ₹28,228 crore ($3.40 billion) in ODI from India.

What’s particularly noteworthy is that three jurisdictions renowned for their tax benefits have made their way into the top ten list of countries receiving Indian ODI. Bermuda received ₹12,582 crore ($1.51 billion), Jersey welcomed ₹11,661 crore ($1.40 billion), and Cyprus garnered ₹9,985 crore ($1.20 billion). Bermuda, for instance, distinguishes itself by imposing no taxes on profits, income, dividends, or capital gains. Furthermore, it places no limits on profit accumulation and imposes no requirements for dividend distribution, according to a report by PwC.

The surge in Indian ODI demonstrates the ambition and global reach of Indian enterprises as they seek opportunities beyond domestic borders. The choice of investment destinations, particularly in countries offering tax advantages, underscores the strategic considerations and financial advantages that guide Indian firms in their international expansion efforts.