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Rediff.com  » Business » India among top 10 FDI destinations in 2014

India among top 10 FDI destinations in 2014

June 25, 2015 10:12 IST

School children holding tri-coloured balloons take part in the Republic Day celebrations in Chandigarh.

Image: School children holding tri-coloured balloons take part in the Republic Day celebrations in Chandigarh. Photograph: Ajay Verma/Reuters

India was 15th on the list in 2013.

India moved up six places to become, for the first time, one of the top 10 destinations for foreign direct investment in 2014, according to the United Nations Conference on Trade and Development’s World Investment Report 2015.

It was 15th on the list in 2013.

A view of Jinmao tower at the Pudong financial district in Shanghai, China.

Image: A view of Jinmao tower at the Pudong financial district in Shanghai, China. Photograph: Nir Elias/Reuters

FDI inflows into India were $34 billion in 2014, up 22 per cent from $28 billion in 2013.

In fact, Inflows into the country were 83.5 per cent of South Asia’s $41.2 billion, including Iran and the seven other member nations of the South Asian Association for Regional Cooperation.

Hong Kong

Image: Hong Kong's central financial district's (L-R) Bank of China Tower, Cheung Kong Centre, HSBC headquarters, Standard Chartered Bank and Legislative Council (front L) are pictured lighted up. Photograph: Tyrone Siu/Reuters

Among the top 10 recipients, China, Hong Kong and the US accounted for the biggest share (in that order). China took the top spot with FDI of $129 billion in 2014 ($124 billion in 2013).

The US, which attracted $231 billion worth of FDI in 2013, only garnered $92 billion in 2014. Hong Kong got $103 billion of FDI in 2014.

Times Sqaure

Image: Image: A view of Times Square in New York City. Photographs: Chip East/Reuters

Others in the top 10 in 2014 were the UK (fourth), Singapore (fifth), Brazil (sixth), Canada (seventh), Australia (eighth) and the Netherlands (10th).

The Unctad report said India’s FDI inflows would continue to rise in 2015 as an expected economic recovery gained ground.

Traffic on the road and the Thames passes the Houses of Parliament in London

Image: Traffic on the road and the Thames passes the Houses of Parliament in London. Photograph: Suzanne Plunkett/Reuters

“In terms of structural composition, manufacturing is gaining strength, as policy efforts to revitalise the sector are sustained, including, for instance, the launch of the ‘Make In India’ initiative in mid-2014,” the report said.

Under the ‘Make In India’ initiative, the Narendra Modi government has identified 25 industrial sectors in which India has the potential to be a world leader, including automotives, chemicals, pharmaceutical and textile industries, it said.

Singapore

Image: People wait to watch a laser light show along Marina Bay overlooking the central business district in Singapore. Photograph: Edgar Su/Reuters

“In the manufacturing sector in South Asia, FDI success stories have emerged at country, industry and local levels, with the automotive industry in India showing how large-scale FDI inflows can reshape the trajectory of industrial progress in low income countries,” the report said.

The report said automotive industry, which India opened up to FDI in 1991, was a key part of the Indian economy and had been identified as a key sector in which India could become a world leader.

Sao Paulo

Image: Sao Paulo, Brazil. Photograph: Wilson Neves de Miranda/Wikimedia Creative Commons

The country accounted for most of the new investment projects announced by global automobile makers and first-tier parts suppliers in South Asia during 2013 and 2014, including 12 projects above $100 million, the report said.

“Investment from the growing automotive industry in India shows potentials of a positive ‘spillover effect’ to productive capacity building in South Asia as a whole,” the Unctad report said.

Canada

Image: Canada is home to 1.2 million Indians. Photograph: Blair Gable/Reuters

As an example, the report noted Mahindra’s $200-million (about Rs 632-crore) proposed investment in a plant in Bangladesh for trucks and utility vehicles.

Sydney

Image: An aerial view of Sydney's Opera House and Circular Quay in the city's central business district. Photograph: Mark Baker/Reuters

Among the positive trends in South Asia, the report said Pakistan and Sri Lanka were receiving greater FDI flows from China, Bangladesh saw an increase in new projects and Nepal was attracting more attention from multinational companies.

Netherlands

Image: Cyclists visit a Dutch tulip field in Noordwijk. Photographs: Michael Kooren/Reuters

The report noted there was greater need for coherence between international taxation and investment policies.

It said the policy imperative should be to take action against tax avoidance to support domestic resource mobilisation and to continue to facilitate productive investment.

BS Reporter in New Delhi
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