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FDI inflows increase but India drops down one rank

Foreign direct investment (FDI) inflows to India in 2018 grew by 6% to $4200 crores. However, India slipped its rank by one place in the latest ranking of top foreign direct investment receiving countries for the year 2018. On 12th June 2019, the United Nations Conference on Trade and Development (UNCTAD) released the World Investment Report for the year 2019.

 

Rise in FDI inflow but dip in rank

 

For the year 2018, India received FDI inflows of $4200 crores against $4000 crores in 2017 marking a growth of 6%. Moreover, the top 3 recipients of inflows in India for 2018 were manufacturing, communication, and financial services.

 

FDI inflows to India from the growth in cross-border merger and acquisitions (M&As) grew by 43.4% to $3300 crores in 2018 against $2300 crores in 2017. This growth was due to transactions in retail trade which include e-commerce as well as telecommunication.

 

The acquisition of Indian e-commerce company Flipkart by Walmart was a prominent deal along with the telecommunications deals by Vodafone of the UK and American Tower (US).

 

In 2018, Tata Motors Ltd made into the top hundred list of multilateral enterprises of the UNCTAD.

 

However, India’s rank in top FDI inflow receiving country for the year 2018 slipped by one place. In 2017, India stood at 9th rank in top FDI inflow receiving country with FDI inflow of $4000 crores. India’s 9th rank was taken by Spain who received¬† FDI inflows of $4400 crores in 2018 against $2100 crores in 2017.

 

United States is at the 1st rank in the list of top FDI inflow receiving country. However, their FDI inflow decreased from $27700 crores in 2017 to $25200 crores in 2018 recording a decrease of 27%.

 

Slip in Global FDI inflow

 

Global FDI inflow recorded at $1.3 lakh crores in 2018 with against $1.5 lakh crores in 2017. In 2018, global FDI inflow dropped by 13% making it the third consecutive fall. In the first 2 quarters of 2018, United States multinational enterprises (MNEs) repatriated their accumulated foreign earnings. Further, tax reforms which were initiated in 2017 coupled with insufficient compensation from upward trends in 2018 were the reason behind fall in the global FDI inflow.

 

In 2018, FDI inflows to developed economies witnessed a dip of 27% and stood at $55700 crores against $75900 crores.

 

FDI inflows to developing countries inched up by 2% and stood at $70600 crores. As a result of the fall in FDI inflow to developed countries, the share of developing countries in global FDI increased to 54%

 

AUTO INDUSTRY NEEDS GOVERNMENT AS A SAVIOUR TO SURVIVE THE SLOWDOWN

 

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