FDI flows to India rise by 22% - UNCTAD

India leads regional FDI as inflows to South Asia rise by 16% in 2014

UNCTAD in its World Investment Report (WIR) 2015 reported India as a dominant recipient of FDI in South Asian region with 22% increase in inflows to US$34 billion in 2014. However, amongst top 20 host economies for FDI inflows globally, India ranked 9th in 2014. The report highlights that FDI inflows to India are likely to maintain an upward trend in 2015 as there are signs of economic recovery. In terms of the sectoral composition of FDI inflows, manufacturing is likely to gain strength as policy efforts to revitalize the industrial sector are sustained specially under the "Make in India" initiative launched in mid-2014.  Inward FDI has led to the emergence of a number of industrial clusters in India , including those in the National Capital Region (Delhi-Gurgaon-Faridabad) in the north, Maharashtra State (Mumbai-Nasik-Aurangabad) in the west, and Tamil Nadu State (Chennai-Bangalore-Hosur). Global foreign direct investment (FDI) fell by 16% to US$1.23 trillion in 2014. The report says the drop can be explained by the fragility of the global economy, policy uncertainty for investors and elevated geopolitical risks. The report reveals that China is the largest recipient of FDI in 2014, followed by Hong Kong ( China ) and the United States of America .  FDI Inflows: Top host economies, 2014  (US$ billions)  Source: PHD Research Bureau, compiled from World Investment Report, 2015, World Bank Developing economies as a group attracted US$681 billion worth of FDI and remain the leading region by share of global investment inflows. Among the top 10 FDI recipients in the world, half are developing economies: Brazil , China , Hong Kong ( China ), India and Singapore . However the developed economies recorded a 28% decline in inflows at US$499 billion. FDI inflows to East and South-East Asia increased by 10% to US$381 billion. The security situation in West Asia has led to a six-year continuous decline of FDI flows (down 4% to US$43 billion in 2014), while in South Asia FDI increased by 16% to US$41 billion. Looking beyond 2014, the report says that a sustained recovery in global FDI is in sight with global FDI inflows projected to grow by 11% to US$1.4 trillion in 2015. The report also foresees further rises to US$1.5 trillion in 2016 and to US$1.7 trillion in 2017. Developed countries should see a large increase in flows in 2015 (up by more than 20%), reflecting stronger economic activity. FDI inflows to developing countries will continue to be high, rising by an average of 3% over the next two years has been highlighted in the report.