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India attracts $5 B FDI in 2004
By agencies
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Monday, 03 October 2005, 19:30 IST
NEW DELHI: Encouraged by an improving economic situation and a more open FDI climate, India received a record level of $5 billion in 2004, the UN Conference on Trade & Development, has said.
The UN body, in its 2005 World Investment Report, said FDI in South Asia increased by 32 percent to $7 billion in 2004, because of higher flows to India, Pakistan and Bangladesh.
It said India has become an important destination for FDI in R&D, with more than 100 transnational corporations having established R&D facilities in India.
The report predicts Indian, Chinese and Korean firms accounting for an increased proportion of an expected continued growth in FDI outflows from the Asia and Oceania region during 2005, including through large-scale overseas mergers and acquisitions.
Comparing the annual FDI inflow over the years, it said that as against an annual average of $452 million during the 10 year period between 1985-95, India's inward FDI flows amounted to $3,403 million in 2001, $3,449 million in 2002, $4,269 million in 2003 and $5,335 million in 2004. As a percentage of gross fixed capital formation this has been from 1.9 percent annual average during 1985-95 to 3.2 percent in 2001, 3 percent in 2002, 3.2 percent in 2003 and to 3.4 percent last year.
Similarly, India's outward FDI flows averaged from a mere $25 million during 1985-95 to $1,397 million in 2001, $1,107 million in 2002, $913 million in 2003 to $2,222 million last year. The report said India's inward FDI stocks went up from $452 million in 1980 to $1,657 million in 1990 to $17,517 million in 2000 and further to $30,827 million in 2003. In 2004, such inward FDI flows amounted to $38,676 million, rising from a level of 0.5 percentage of gross domestic product in 1990 to 3.7 percent in 2000, 5.2 percent in 2003 and to 5.9 percent last year.