India's FDI rank rises to 7th position: UNCTAD Report

• 11 Jun 2022

India jumped one position to 7th among the top recipients of foreign direct investment (FDI) in the last calendar year (2021) despite FDI inflows into the country declining, according to the United Nations Conference on Trade and Development (UNCTAD).

• In its latest World Investment Report, UNCTAD said FDI inflows into India declined to $45 billion in 2021 from $64 billion in the preceding year.
• While the United States ($367 billion) remained the top recipient of FDI, China ($181 billion) and Hong Kong ($141 billion) also retained second and third position respectively.
• Among the top 10 host economies, only India saw a decline in its inflows. However, outward FDI from India rose 43 per cent to $15.5 billion in 2021.
• Flows into India declined to $45 billion. However, a flurry of new international projects were announced. The largest number of projects (23) was in renewables. Large projects include the construction in India of a steel and cement plant for $13.5 billion by ArcelorMittal--Nippon Steel (Japan) and the construction of a new car manufacturing facility by Suzuki Motor (Japan) for $2.4 billion.

Other Observations

• According to the report, global FDI flows recovered to pre-pandemic levels last year, growing 64 per cent to $1.6 trillion.
• The prospects this year are grim with the war in Ukraine results in a triple crisis of high food and fuel prices and tighter financing.
• Other factors clouding the FDI horizon include renewed pandemic impacts, the likelihood of more interest rate rises in major economies, negative sentiment in financial markets and a potential recession.