India among most attractive FDI destination
By siliconindia   |   Wednesday, 25 August 2010, 09:34 IST   |    5 Comments
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India among most attractive FDI destination
Bangalore: Of late every sector in India has witnessed a growing interest of foreign direct investment. The country, infact, has leaped from its 13th position to be the 9th most attractive destination for FDI as it has received investments worth $35 billion in 2009. Though U.S. economy turned frail after recession, it maintained the top slot attracting maximum FDIs. The facts were revealed in the recent Trade and Development study convened by the UN Conference, which also pinpointed that a huge chunk of FDI is aimed at developing countries, especially to the services sector. These countries are also emerging as significant sources for foreign investments. Net FDI into India is in the $20 billion-plus range from $5 billion earlier. Over recent years, trends in both inward and outward FDI to/by India have risen significantly, with Inward FDI rising to over $30 billion since FY08 and outward investments by Indian companies rising to $15 billion range.This has resulted in net FDI now being over $20 billion as against $3-4 billion earlier in 2005. The Top 10 slots apart from India, are occupied by U.S. followed by China, France, Hongkong, UK, Russia, Germany Saudi Arabia and Belgium. 1. U.S. Despite the recession that ravaged the American economy, the United States remains the top FDI destination in the world. The amount of foreign direct investment that flowed into the U.S. in 2009 stood at an astonishing $130 billion, almost the same as the FDI to China and India put together. However, FDI in the U.S. fell by 60 percent from a year earlier to $46.1 billion during the first three months of this year, leaving a gap of $2.3 billion. 2. China The FDI inflows into China in the first seven months of 2010 have risen to $58.35 billion. In 2009, it received a whopping $95 billion in foreign direct investment. However, Chances of China overtaking the United States as top foreign direct investment destination are slim in short-term even as it remains the second most attractive country for investors. The gap between the U.S. and China would remain despite robust momentum in Chinese FDI even though it is closing in on the FDI volumes, says the UNCTAD report. 3. France In a world struggling to climb out of the global recession, France is a strong leader in foreign direct investment. In 2009, France ranked third worldwide in FDI inflow ($60 billion), after the United States ($130 billion) and China ($95 billion). In 2009, France weathered the global economic crisis with GDP growing more favourably (less than -2.6 percent) than Germany (-4.9 percent) and the United Kingdom (-4.9 percent) 4. Hong Kong Hong Kong continues to draw huge amounts of foreign direct investment. In 2009, the country got $48 billion in FDI inflows. Hong Kong has a thriving economy. The largest sector of industry is manufacturing. Hong Kong has highly developed capitalist economy, and is ranked among the freest economy in the world. 5. The United Kingdom The United Kingdom has been struggling to come to terms with the slowdown that has hit its economy. Yet, Britain is still one of the world's top FDI destinations. In 2009, the UK got $46 billion in FDI. London, the British capital, is Europe's top business city and one of the largest financial centres in the world. It is also home to the headquarters for 150 of the top 500 global companies. 6. Russia Russia received $39 billion in FDI in 2009 making it one of the most destinations for investors. Although, foreign direct investment into Russia fell 11 per cent in 2009, the country remains one of the hottest spots for FDI. Its strong economic recovery has led to many foreign companies investing heavily in Russia. Reports say that Russia could see a boom in FDI in the coming years and could see inflows of up to $70 billion by 2013. 7. Germany Germany, the strongest economy in Europe, received $36 billion in FDI in 2009. And although it remains a top FDI destination globally, investments into the nation have slipped slightly. Mostly it has been the high labour costs that have dissuaded foreign companies from setting up new manufacturing plants in Germany. 8. Saudi Arabia Saudi Arabia attracted foreign direct investments of about $36 billion. The latest UNCTAD report said that the kingdom was the eighth largest recipient of foreign direct investment in the world in 2009. It attracted $38 billion in 2008. The kingdom was the best performer in the Middle East last year. Top sources of FDI inflows to Saudi Arabia included from the United States with $5.8 billion, followed by Kuwait with $4.3 billion and the United Arab Emirates with $3.8 billion. 10. Belgium Foreign investments in Belgium are normally in the form of foreign firms establishing subsidiaries in the country. Belgium is a strong economic centre in Europe. The country received $34 billion in FDI in 2009, putting it among the top 10 foreign direct investment destinations in the world.

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