With FDI At $25 Bn In 2010, India Slips To 14th Spot: UN Report.

At a time when other countries of developing Asia are setting new records in foreign direct investment (FDI) inflows, India’s position among the top 20 recipients fell to 14th position, from 8th last year, down at $25 billion in 2010 from $36 billion in 2009, according to a UN report released on Tuesday.

In a stark contrast, China stood at 2nd position with inflows totalling $106 billion in 2010, and Brazil stood at 5th position with inflows at $48 billion during the last year, the UNCTAD’s World Investment Report 2011 said.

The country that saw the maximum FDI inflow last year is the United States at $228 billion.

India’s ranking by the UN agency comes at a time when the government has been maintaining that political controversies have not dented investor sentiments for investing in the country. On Tuesday, Finance Minister Pranab Mukherjee, speaking in London, had said that FDI inflows rose to more than $7.9 billion during April-June quarter, which was almost twice the amount received during the year-ago period.

“The ground reality is that in the last three months, India received more than $7.9 billion FDI, almost double the amount recorded during the corresponding period in the previous year. It speaks of the investment climate,” Mukherjee had said.

He had said during the last 10 years, India has received total foreign direct investment of $176 billion, while Indian companies have invested $76 billion outside.

Present on the occasion of the launch of the UN report, independent economic researcher Premila Nazareth Satyanand said last year’s FDI trend is a little bit worrying and the country needs to have a good investment climate.

According to the report, half of the top 20 host economies for FDI last year were developing and transition economies. FDI inflows to South, East and South-East Asia rose 24 per cent to $300 billion, nearly one-fourth of the global total of $1.24 trillion in 2010.

“FDI to South Asia declined to $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 $913 million,” the report added.

According to official data, FDI inflows in India stood at $ 9.42 billion in 2010-11.

Elaborating on the global FDI, the UNCTAD report said that foreign direct investments worldwide are projected 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, are increasingly shaping the global value chains.

NEMs of international production generated at least $2 trillion in sales globally in 2010 are growing rapidly, shaping world trade and investment patterns, the report noted.

Source : indianexpress.com