India emerges as top FDI destination, replaces China

The Dollar Business Bureau

India, in 2015, emerged as the top destination for foreign direct investment (FDI) in the world, replacing China, according to a report by investment monitor fDi Intelligence, a division of The Financial Times.

“India has been ranked highest in the list of countries that attracted $63 billion worth of FDI in 2015, in terms of capital investment after a year of announcements of high-value projects specifically in coal, renewable energy, and oil & natural gas sectors” the report said.
In addition, the report mentioned that the country’s number of projects have increased by 8 percent to 697. However, these numbers are still down compared to China’s 789 projects.

India is emerging as an important destination for projects in renewable energy, due to a broader policy of government on incentives, infrastructure development and programmes, specifically formulated to attract investment, according to fDi Markets’ report.

"Last year, India, for the first time became the leading country for FDI, surpassing the US (with $59.6 billion of greenfield FDI) and China (with $56.6 billion of FDI)," the investment monitor noted.
The top Indian states that attracted the highest FDI in 2015 were Gujarat with $12.4 billion in investment, whereas Maharashtra attracted an investment worth $8.3 billion. Andhra Pradesh, Jharkhand and Karnataka were the other states mentioned in the list.
The report stated that the growth potential of the domestic market and proximity to international markets are the two major reasons for increasing FDI.

On the other hand, for the first time in several years, China saw a 23 percent drop in capital investment and a 16 percent decline in FDI projects, as there is slow economic growth and rising costs, the report added.