FDI inflows to India doubled to reach $59 bn in 2015: UNCTAD
Foreign Direct Investment (FDI) flows to India nearly doubled to reach around $59 billion in 2015, thanks to several steps taken by the government to improve the investment climate in the country, a United Nations trade body has said. According to the report titled 'Global Investment Trends Monitor' released by the UNCTAD (United Nations Conference on Trade and Development), Asia remained the largest FDI recipient region in the world, accounting for one third of global FDI flows. “In 2015, FDI inflows to developing Asia rose by 15% to an estimated $548 billion, a new record,” the report said, adding, “FDI flows to India nearly doubled, reaching an estimated $59 billion. Measures taken by the government to improve the investment climate have had an impact.” The US topped the list of countries that attracted FDI in 2015 by receiving investments worth $384 billion. Among developing economies, Hong Kong (China) emerged as the most preferred destination for global investors with the total FDI inflows around $163 billion. The FDI inflow to mainland China rose by 6% to an estimated $136 billion. “While inward FDI flows in manufacturing declined, those in services kept momentum and drove total inflows to a new record level,” the report said, adding that the flow of FDI funds to Singapore dropped by 4% to reach $65 billion. Globally, FDI flows jumped 36% last year to reach around $1.7 trillion, the highest level since 2008-2009. “Strong growth in flows was reported in the European Union (EU) as well as in the United States where FDI quadrupled, although from a historically low level in 2014. As a result, the pattern of FDI by economic grouping tilted in favour of developed countries which now account for 55% of global FDI inflows in 2015,” the report said. While developing economies saw their FDI reaching a new high of $741 billion, 5% higher than in 2014, flows faltered in Africa and Latin America and the Caribbean reflecting the plummeting prices of their principal commodities exports. “Flows to transition economies continued to fall (-54%) as tumbling international commodities prices and regional conflicts undercut FDI,” it said. The report gave credit to increase in cross-border merger and acquisition deals as well as rising investments in greenfield projects for the sharp rise in FDI flows last year. However, it also pointed out a decline in announced greenfield investments in developing economies and projected a downfall in FDI in 2016 due to volatility of global financial markets and weak demand. “Barring another wave of M&A deals and corporate reconfigurations, FDI flows are expected to decline in 2016, reflecting the fragility of the global economy, volatility of global financial markets, weak aggregate demand and a significant deceleration in some large emerging market economies,” it added.
January 21, 2016 | 02:50pm IST
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