India’s Position among Top 20 FDI Recipients fell to 14th from 8th in 2009

The World Investment Report 2011 was released by UNCTAD on 26 July 2011. According to the report, India’s position among the top 20 FDI recipients fell to 14th position, from 8th in 2009 at a time when other countries in Asia were setting new records in foreign direct investment (FDI) inflows. India’s FDI inflow went down to $25 billion in 2010 from $36 billion in 2009, according to a UN report.

However, according to Finance Minister Pranab Mukherjee, FDI inflows rose to more than $7.9 billion during April-June quarter of 2011, which was almost twice the amount received during the year-ago period. During the last 10 years, India received total foreign direct investment of $176 billion, while Indian companies have invested $76 billion outside. India saw FDI inflows of USD 19.42 billion in 2010-11. Foreign direct investment flows into India are currently sluggish given the uncertain global economic conditions.

India is ranked way below neighbouring China, which saw FDI inflows to the tune of USD 106 billion in 2010. China stood at 2nd position with inflows totalling $106 billion in 2010, and Brazil stood at 5th position with inflows at $48 billion.

The country that saw the maximum FDI inflow in 2010 was the United States at $228 billion
According to UNCTAD, foreign direct investment inflows worldwide climbed 5 per cent to about USD 1.24 trillion in 2010 compared to 2009. FDI to South Asia declined to USD 32 billion, reflecting a 31 per cent slide in inflows to India and a 14 per cent drop in flows to Pakistan. By contrast, inflows to Bangladesh, a rising low-cost production location, increased by nearly 30 per cent to USD 913 million. FDI inflows to South, East and South-East Asia rose by 24 per cent to USD 300 billion.

The report stated that half of the top 20 host economies for FDI in 2010 were developing and transition economies.

UNCTAD report projected foreign direct investments worldwide to return to pre-crisis levels this year, with inflows expected to be up to $1.6 trillion.

Cross border non-equity modes (NEMs) including contract manufacturing, services outsourcing, contract farming were found to be increasingly shaping the global value chains. NEMs of international production generated at least $2 trillion in sales globally in 2010 thereby shaping world trade and investment patterns.