FDI and FPI in Post-Pandemic India: A Recovery Perspective

The COVID-19 pandemic has been disrupted global economic activities at an unprecedented scale, significantly it has affected cross-border investment flows. India, like many other emerging economies, experienced substantial volatility in both Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI). This paper explores the impact of the pandemic on FDI and FPI inflows in Indian economy and evaluates the effectiveness of the government’s recovery strategies in stabilizing and revitalizing foreign investments during the post-pandemic period. The study integrates quantitative time-series analysis of FDI and FPI data from 2017 to 2023.Quantitative data sourced from the Reserve Bank of India (RBI), Ministry of Finance, and SEBI reveals a sharp contraction in FDI and FPI inflows in 2020 due to investor uncertainty, lockdowns, and supply chain disruptions. However, a recovery trend has been observed post-2021, particularly in sectors such as digital services, healthcare, renewable energy, and fintech. Thematic analysis of qualitative data highlight that while investor sentiment was initially cautious, transparency in policy, macroeconomic stability, and targeted incentives encouraged a resurgence in long-term FDI. FPI inflows, being more volatile, responded quickly to global monetary policies and domestic reforms. This paper contributes to the broader discourse on investment resilience in crisis contexts. It highlights sector-specific trends, policy effectiveness, and offers actionable recommendations to strengthen India's position as an attractive and stable destination for foreign capital in the evolving post-pandemic global economy.