India among top 10 global economies for FDI in 2021: UN report
The United Nations on Thursday said foreign direct investment inflows into India declined by USD 19 billion to USD 45 billion in 2021, but the country still remains among the top 10 global economies for FDI.
According to the United Nations Conference on Trade and Development (UNCTAD) World Investment Report, FDI inflows hit pre-pandemic levels last year, reaching nearly USD 1.6 trillion. However, the prospects for this year are grim as Ukraine will be hit by security and humanitarian crises due to the war, macroeconomic shocks from the conflict, rising energy and food prices, and growth in global FDI in 2022 and beyond. Investor uncertainty.
India, which received USD 64 billion in FDI in 2020, reported a decline of USD 45 billion in FDI inflows in 2021. But India was still among the top 10 economies for FDI inflows in 2021, ranking seventh behind the US, China, Hong Kong, Singapore, Canada and Brazil. South Africa, Russia and Mexico rounded out the top 10 economies for FDI inflows in 2021.
“Flows into India reduced to USD 45 billion. However, new international project finance deals were announced in the country: 108 projects, compared to an average of 20 projects in the past 10 years,” the report said, adding that the largest number of 23 projects were in renewables.
Major projects include construction of a steel and cement plant in India by ArcelorMittal Nippon Steel (Japan) for USD 13.5 billion and a new car manufacturing facility by Suzuki Motor (Japan) for USD 2.4 billion.
Foreign direct investment from South Asia, mainly from India, grew 43 per cent to USD 16 billion.
The report said the war in Ukraine would have far-reaching consequences for international investment in economic development and the Sustainable Development Goals (SDGs) in all countries. It comes as a fragile world economy is beginning to recover unevenly from the effects of the pandemic.
The report said the direct effects of the war on investment flows from Russia and Ukraine include halting of existing investment projects and cancellation of announced projects, exodus of multinational enterprises (MNEs) from Russia, widespread loss of property values and sanctions. Virtually stopping the outflow.
It added that as of today, MNEs from China and India account for a negligible share (less than 1 per cent) of FDI stock in Russia, although their share is larger in ongoing projects.
Despite successive waves of COVID-19, FDI in developing Asia rose for the third consecutive year to an all-time high of USD 619 billion, underscoring the resilience of the region, the report said. It is the largest recipient of FDI in the world, accounting for 40 per cent of the global inflows.