FDI inflows into India grew 17 per cent to $28 billion in 2013 despite unexpected capital outflows in the middle of the year, according to a United Nations report.

It also said that foreign direct investment across the world rose to the levels not seen since the start of the global economic crisis in 2008.

India ranked 16th among the top 20 global economies, receiving the maximum FDI.

Global FDI

Global FDI increased by 11 per cent to an estimated $1.46 trillion in 2013, with the lion’s share going to developing countries, according to the UN Conference on Trade and Development (UNCTAD) report.

UNCTAD forecasts that FDI inflows will gradually rise to $1.6 trillion and $1.8 trillion in 2014 and 2015, respectively.

As global economic growth gains momentum, this may prompt investors to turn their cash holdings into new investments, it said.

However, uneven levels of growth, fragility and unpredictability in a number of economies and risks related to the tapering of quantitative easing could dampen the FDI recovery.

FDI inflows into developing economies reached a new high of $759 billion, accounting for 52 per cent, during the year. Developed countries, however, remained at an historical low (39 per cent) for the second consecutive year.

FDI inflows into developed countries increased 12 per cent to $576 billion, with such investments into the European Union increasing, while flows to the United States continued their decline. The US received $159 billion in FDI inflows last year.

The BRICS — Brazil, Russian Federation, India, China and South Africa — continued to be strong performers in attracting FDI. Their current share of global FDI inflows at 22 per cent is twice that of their pre-crisis level.

(This article was published on January 29, 2014)
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