Subhraprakash Mondal IIM Udaipur

PGP- Batch 2014-16

India in Top 10 Destination of FDI: Global Investment Report, 2015 (UNCTAD)

As per the Global Investment Report 2015, released by the Division on Investment and

Enterprise of United Nations Conference on Trade and Development (UNCTAD) on June 25,

2015, India is at ninth position in terms of total FDI inflows during 2014.

The report states 16 percent decrease in global FDI inflow. Despite this global declining trend,

developing countries manage 2 percent increase in inward FDI. The BRICS region also had

experienced declining FDI trend. FDI in BRICS region fell by 14 percent due to 70 percent

decrease only in Russia. FDI inflow for Russia has been decreased from $62 billion in 2013 to

$20 billion in 2014. India ($ 34 billion) secures third position among BRICS countries after

China ($ 128 billion) and Brazil ($ 62 billion). India attracts FDI consistently since 2012 at a

CAGR of 19 percent. In 2014, FDI inflow in India increased by 22 percent. Though total FDI

inflow for China is more than that of India, growth rate of FDI inflow in China is not so good.

FDI inflow in China grew by 3 percent in last year and since 2012, it grew at CAGR of 4

percent.

The report talks about FDI outflow trend also. India experienced a huge increase in FDI outflow

during 2014 ($1.7 billion to $9.5 billion). Though India is not in top 20 in terms of FDI outflows,

however, as per the report India is at seventh position among prospective top investing countries

during 2014-16 while India (14 percent of global FDI inflow) secures third position after China

(28 percent), USA (24 percent) among the prospective top destination economies for the period

of 2015-17.

Policy uncertainty and various geopolitical risks are the major reason behind declining trend.

Meanwhile, Government of India has eased the regulatory framework in terms of foreign direct

investment to create an investor-friendly economic zone. Increasing FDI inflow in India

indicates the level of comfort and safety for the foreign investor in the Indian market.

Subhraprakash Mondal IIM Udaipur

PGP- Batch 2014-16

Source: World Investment Report 2015 (UNCTAD)

Reference:

1. World Investment Report 2015 (UNCTAD): http://unctad.org/en/PublicationsLibrary/wir2015_en.pdf

24

170

28

231

34

92

0

50

100

150

200

250

300

350

Brazil Russia India China South Africa BRICS Region UnitedStates

FDI Inflow trend (Billion USD)

2012 2013 2014