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FDI Equity Inflows In India Grew 6 Per Cent In 2018 To USD 42 Bn: UN Report

FDI Equity Inflows In India Grew 6 Per Cent In 2018 To USD 42 Bn: UN Report

As per a UN report, India ranked amongst the top 20 host economies for foreign direct investment inflows in the period of 2017-18. According to this report, FDI inflows into the country grew by 6 per cent to US 42 billion in 2018, with significant inflows in the manufacturing, communication, and financial services sectors, and cross border mergers and acquisition activities.

The World Investment report 2019, released by the United Nations Conference on Trade and Development (UNCTAD) said that global overseas investment inflows decreased by 13 per cent in 2018 to USD 1.5 trillion the previous year the third consecutive annual decline.

However, foreign direct investment equity inflows increased by 3.9 per cent and amounting to USD 512 billion dollars in developing countries of Asia. This growth occurred mainly in China, Hong Kong, Singapore, Indonesia and other ASEAN countries, as well as India and Turkey.

Asian countries continue to remain the world’s largest recipients of foreign direct investments with 39 per cent of global inflows in 2018 as compared to 33 per cent in 2017.

Investment in India increased by 6 per cent to USD 42 billion with strong inflows in manufacturing, communication, financial services and cross-border merger and acquisition (M&A) activities, the report said.

The report further added that India has historically accounted for 70 to 80 per cent of foreign investment equity inflows. The growth in cross-border M&As for India from USD 23 billion in 2017 to USD 33 billion in 2018 was primarily due to transactions in retail trade with USD 16 billion, which includes e-commerce, and telecommunication with USD 13 billion.

It said that notable mega deals included the acquisition of Flipkart, India’s biggest e-commerce platform, by American giant Walmart. In addition, telecommunication deals involving Vodafone (UK) and American Tower (US) amounted to USD 2 billion.

As per the report, India, which is not normally in the list of top 20 outward investor countries, was considered to be amongst the top 10 most important sources of FDI for the duration of 2019 to 2021.

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