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India Among Top 10 FDI Recipients
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India was amongst the world’s 10 largest foreign direct investment recipients in 2014, says the United Nations Conference on Trade and Development UNCTAD). Among developing and transitional economies, the country stood forth, behind China and Hong Kong, Singapore and Brazil, an UNCTAD report, released here today states.
The World Investment Report 2015 tracks the global FDI flows during the previous year.
According to the report, FDI inflows to South Asia rose to $41 billion in 2014, primarily owing to good performance by India. “FDI inflows to the country surged by 22 per cent to about $34 billion. FDI inflows to India are likely to maintain an upward trend in 2015 as economic recovery gains ground”, the report adds.
Highlighting the “Make in India” initiative of the government, the report says that FDI inflows into the manufacturing sector is likely to gain strength.
The report has picked up automotive industry in India to show how large-scale FDI inflows can reshape the trajectory of industrial progress in low-income countries. “The automotive industry is a key part of the Indian economy and has been identified as one of the key industries in which India has the potential of becoming a world leader. According to data from the Indian government, accumulated FDI inflows to the automotive industry from April 2000 to November 2014 amounted to $11.4 billion. The country accounted for the majority of greenfield investment projects announced by global automakers and first-tier parts suppliers in South Asia during 2013–2014, including 12 projects above $100 million. Inward FDI has led to the emergence of a number of industrial clusters in India, including those in the National Capital Region (Delhi-Gurgaon-Faridabad) in the north, Maharashtra State (Mumbai-NasikAurangabad) in the west, and Tamil Nadu State (Chennai-Bangalore-Hosur) in the south”, it said .
Meanwhile, global FDI fell by 16 per cent to $1.23 trillion in 2014. The report says the drop can be explained by the fragility of the global economy, policy uncertainty for investors and elevated geopolitical risks. New investments were also offset by some large divestments.
China was the largest recipient of FDI in 2014, followed by Hong Kong (China) and the USA. Developing economies as a group attracted $681 billion worth of FDI and remain the leading region by share of global investment inflows. Among the top 10 FDI recipients in the world, half are developing economies: Brazil, China, Hong Kong (China), India and Singapore. “This is in line with the expansion abroad by multinationals from developing economies which reached its highest level ever, at almost half a trillion dollars”, it said.
Looking beyond 2014, the report says that a sustained recovery in global FDI is in sight with global FDI inflows projected to grow by 11 per cent to $1.4 trillion in 2015. The report also foresees further rises to $1.5 trillion in 2016 and to $1.7 trillion in 2017.