FDI in India grew by 6% to $ 42 billion in 2018: UNCTAD

According to United Nations Conference on Trade and Development’s (UNCTAD) World Investment Report 2019,released on June 12, 2019, Foreign Direct Investment (FDI) in India grew by 6% to $42 billion in 2018. The US was the world’s top recipient of FDI with $252 billion followed by China with $139 billion. India was ranked 10^th as an FDI recipient.

Key Points:

• The top three industry recipients were Manufacturing, Communication and Financial Services.
• In 2017, FDI was $40 billion and the growth was driven by Mergers and Acquisitions (M&A).
• The growth in cross-border M&As from $23 billion in 2017 to $33 billion in 2018 was due to transactions in retail trade which accounted for $16 billion. It included e-commerce and telecommunication worth $13 billion.
• Announced greenfield investment were doubled to $56 billion in 2018, with projects in manufacturing industries including automotive.
• There were 373 Special Economic Zones (SEZ) in India, of which 142 were still under development and 61 more were planned. Out of 231 SEZs in operation, 60% were specialized in Information Communications Technology (ICT) related manufacturing and services.
• Globally, FDI slipped by 13% in 2018 to $1.3 trillion from $1.5 trillion in 2017, the third consecutive annual decline. It increased by 2% for developing countries.
• In 2018, China received the highest foreign inflows among developing countries worth $139 billion.
• In South Asia, overall FDI inflows increased by 3.5% to $54 billion.
• inflows to developing countries in Asia grew by 3.9% to $512 billion in 2018, with growth occurring mainly in China, Hong Kong, Singapore, Indonesia and other ASEAN countries as well as India and Turkey. The Asian region remained the world’s largest FDI recipient, resulting 39% of global inflows in 2018, up from 33% in 2017.
• India and the United Arab Emirates (UAE) were considered among the top 10 most important sources of FDI for 2019 to 2021 period.
• Outflows to Asia increased by 31% to $49 billion. Outflows to most major economies in the region expanded, including those to China- up 12% to $10 billion, India- doubling to $3.2 billion and the Republic of Korea -trebling to $4.8 billion.

About UNCTAD:
♦ Founded: 1964
♦ Headquarters: Geneva, Switzerland
♦ Secretary-General: Dr. Mukhisa Kituyi