Foreign Direct Investment flows into India nearly doubled in 2015 to $59 billion while the US emerged as the top host country for FDI last year, the UN’s trade agency has said.
Global FDI flows “unexpectedly” increased significantly by 36 per cent, according to the annual report of the United Nations Conference on Trade and Development.
“Global FDI unexpectedly increased significantly to $1.7 trillion and this is closer to the pre-crisis level and it is the highest since the global financial and economic crisis,” said James Zhan, UNCTAD’s
Director of the Division on Investment and Enterprise.
Just ahead of the release of the report on global investment in 2015 and forecasts for 2016, Zhan yesterday said, “The bad news is that part of this global FDI are not really in the productive sector and is due for either inversion or corporate reconfiguration.”
Developing economies, as a whole, saw their FDI reaching a new high of $ 741 billion — 5 per cent higher than 2014, the report said.
Asia remained the largest FDI recipient region in the world, surpassing half a trillion US dollars and accounting for one-third of the global FDI flows, it said.
The US bounced back as the top host country for FDI in 2015 with FDI worth $ 384 billion, the report said.
The US is followed by Hong Kong ($163 billion), China ($136 billion), Netherlands ($90 billion), the UK ($68 billion), Singapore ($65 billion), India ($59 billion), Brazil ($56 billion), Canada ($45 billion) and France ($44 billion) as the top 10 FDI host economies of the world.
According to a UNCTAD report, FDI flows to India in 2014 was an estimated 35 billion, with maximum growth in services sector especially in electricity, gas, water, waste management and information and communication.
FDI flows to the developed countries bounced back sharply reaching their second highest level ever at $ 936 billion.
In Africa, Latin America as well as transition economies there was a decline in FDI last year partly because of stumbling commodity prices and regional instability.
FDI flows are expected to decline in 2016, UNCTAD said.
This reflects “the fragility of the global economy, volatility of global financial markets, weak aggregate demand and significant deceleration in large emerging economies”, it said.
Elevated geo-political risks and regional tensions could further amplify these economic challenges, the report said.