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India contributed significantly to the growth in foreign direct investment (FDI) inflows to South Asia in 2014 which increased by 16 per cent to $41 billion, a United Nations report has said.
“FDI inflows to India are likely to maintain an upward trend in 2015 as economic recovery gains ground,” the Unctad’s ‘World Investment Report 2015’ report added.
India attracted 22 per cent higher FDI in 2014 worth about $34 billion. The country also posted a five-fold increase in its FDI outflows to $10 billion, recovering from a sharp decline the year before.
In terms of sectoral composition of FDI inflows, manufacturing is likely to gain strength, as policy efforts to revitalise the industrial sector are sustained, including, the ‘Make in India’ initiative launched in mid-2014, the report said. In the manufacturing sector in South Asia, the report says that FDI success stories have emerged at country-level, industry-level and local-level, with the automotive industry in India showing how large-scale FDI inflows can reshape the trajectory of industrial progress in low-income countries.
“India accounted for the majority of greenfield investment projects announced by global automakers and first-tier parts suppliers in South Asia during 2013-14, including 12 projects above $100 million,” it said.
FDI flows from China to Pakistan increased during the year leading to a 31 per cent rise in overall FDI flow to $1.7 billion.
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