The National Capital Region (NCR) may have truly established itself as the preferred destination for foreign direct investment (FDI) into India.

Data from the commerce ministry on FDI show that in the past three years, the NCR--which includes Delhi, Gurgaon and Noida--has consistently pipped the Mumbai region to the top spot when it comes to attracting FDI into the country.

Traditionally, Mumbai had occupied the pole position when it came to FDI inflows. However, beginning 2013-14, the NCR has seen more inflows than the financial capital and areas in its vicinity.

In 2013-14, the Delhi region attracted FDI worth a little over $6.2 billion. By 2015-16, however, the figure more than doubled to $12.74 billion. During the same period, inflows into Mumbai rose from a little over $3.4 billion to $9.5 billion.  

The upsurge in FDI inflows into Delhi and its satellite towns of Gurgaon and Noida could, in part, be a result of investments coming into several e-commerce companies that are based there. Several e-commerce companies, including Snapdeal, Grofers, MakeMyTrip, Lenskart, Yatra, Paytm, Mobikwik, YepMe, Yebhi, Goibibo and Olx are based out of the region and many among them have raised funds from foreign shores.   

In fact, if this trend continues, Delhi could soon surpass Mumbai even on a cumulative basis, if one considers historical data on inflows beginning 2000. Between April 2000 and March 2016, the Mumbai region received FDI of $82.62 billion. In comparison, Delhi only got $62.15 billion.  

E-commerce companies based in the NCR have been attracting significant amounts of foreign funding in the past three to four years. In September 2015, it was reported that Chinese e-commerce behemoth Alibaba had made a $500 million strategic investment in mobile wallet company Paytm, just months after acquiring a 25% stake in the company in February 2015 for $575 million. In February, the Noida-based company raised $400 million to set up its payment bank, after it became one of 11 entities to win a licence to do so.  

Similarly, in August 2015, Alibaba, Japan’s Softbank and Taiwanese Foxconn had invested $500 million in Snapdeal. This followed a $627 million infusion into Snapdeal by Softbank in October 2014. Then, in February 2016, it was reported that Snapdeal raised $200 million from Canada-based pension fund Ontario Teachers’ Pension Plan and venture capital fund Iron Pillar.

Earlier this year, it was reported that Jabong had received $20 million in funding from the Global Fashion Group, founded by Swedish Investment AB Kinnevik and German Rocket Internet SE.

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