India at 14th position in 2010 FDI inflow index
si Team
Monday, August 1, 2011
India slipped 10 positions on the list of countries attracting the highest foreign direct investment (FDI) and fell to 14th position in the 2010 list. India ranked fourth on the list of top 10 recipients and sources of FDI inflows in developing Asia in 2009 and 2010 behind China and Singapore. FDI in India declined to $25 billion as against $36 billion last year, according to a UN survey.

The list is headed by U.S. with $228 billion, second comes China with $106 billion. The U.S tops the list of countries with overseas fund inflows at $228 billion, followed by the Chinese mainland, which attracted inflows of $106 billion, and Hong Kong at $69 billion. Belgium was the fourth largest FDI inflow destination at $62 billion.

According to the UNCTAD's annual investment survey, World Investment Report 2011, the FDI to South Asia declined to $32 billion, reflecting a 31 percent slide in inflows to India and a 14 percent drop in flows to Pakistan. In contrast to this, inflows to Bangladesh increased by nearly 30 percent to $913 million. “The desire to invest in India is still there but we need to put in a system to ensure that the deal that is given will stand for some time,” said Biswajit Dhar, director general, Research and Information System for Developing Countries.

As a result of a number of major global acquisitions by Indian companies in the period between 2007 and 2011, India is the fifth largest source of funds (FDI outflow) in developing Asia. Among the major buyouts that figured in the UN report was Tata Steel's acquisition of UK based Corus group worth $11.8 billion and Hindalco Industries's acquisition of U.S. firm Novelis worth $5.8 billion. Tata Motors also acquired UK-based Jaguar Cars for $2.3 billion, Essar Steel Holdings bought Canada's Algoma Steel for $1.6 billion and United Spirits acquired Whyte & Mackay of UK for $1.17 billion.

The report also said that global FDI investment inflows rose 5 percent to $1.24 trillion in 2010. However, it added that FDI flows at the end of the year were over 15 percent below their pre-crisis average and nearly 37 percent below their peak in 2007.

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