How the tech startup boom in India changed the FDI pattern

The proliferation of tech startups in India and the investor interest they have generated has changed the composition of foreign direct investment inflows into the country.

The share of Bangalore – home to many tech startups -- in FDI inflows has more than tripled while the computer hardware and software sector has attracted eight times higher amount in the first half of 2015-16. Also, Singapore – home to Flipkart's parent -- has emerged as the top source of FDI by outpacing Mauritius, which has lost its edge due to uncertainty over the revision of a tax treaty with India.

"Bangalore has come up in the last 12-24 months as a breeding ground for tech startups and has a fertile environment that is attracting FDI," said Prasad Gadkari, partner at IDFC Private Equity.