17 April , 2020 Fdiindia
What Agencies Monitor FDI Trends Across the Globe?
A foreign direct investment (FDI) is an investment made by a firm or individual based in one country into a business located in another country. Under this type of investment, an investor does not simply purchase equities of foreign based companies but establishes foreign business operations or acquires foreign business assets— the former is called foreign portfolio investments, which is differentiated from foreign direct investment in terms of lasting interest.
Under FDI in India, an overseas investor is also given a minimum of 10 per cent voting rights in the day to day functioning of the business. The 10 per cent ensures that the controlling power still lies with the host country. The investor will have a certain degree of control but not enough to take decisions solely.
Just to make things more clear, here is an example of a foreign direct investment made by one country to another: If a famous food chain from the United States opens up a branch in India from the scratch; meaning they duplicate their business in the US in India. Economies usually encourage more FDI equity inflows as it is a critical driver of growth and development.
There are mainly three agencies or organisations that keep a track of foreign direct investment trends across the world:
1) UN Conference on Trade and Development,
2) The Organisation for Economic Corporation and Development,
3) The International Monetary Fund
1) The UN Conference on Trade and Development (UNCTAD): They publish Global Investment Trends Monitor to summarise foreign direct investment across the globe.
2) The Organisation for Economic Corporation and Development (OECD): This organisation publishes quarterly foreign direct investment stats for various economies. It tracks both equity outflows and inflows.
3) The International Monetary Fund: IMF published its first ever Worldwide Survey of Foreign Direct Investment Positions in 2010. This annual survey tracks investments across 72 countries and ranks them in terms of FDI equity inflows.