FDI Inflows Into India Jump 18%

Foreign direct investment inflows into India in 2016 calendar year jumped 18% to a record $46.4 billion, at a time when global FDI inflows fell.

Data released by the Department of Industrial Policy and Promotion showed FDI inflows in 2016 were strongest in October with $6.2 billion inflows followed by $5.1 billion in September, Livemint reported.

Global flows of FDI fell 13% in 2016 to an estimated $1.52 trillion as global economic growth remained weak and world trade volumes posted anemic gains, according to the latest UNCTAD Global Investment Trends Monitor.

“FDI recovery continues along a bumpy road. Particularly of concern is the sharp drop-off in manufacturing investment projects, which play such an important role in generating badly needed productivity improvements in developing economies,” UNCTAD secretary-general Mukhisa Kituyi said in a statement on February 1.

UNCTAD said FDI inflows into India fell 5% to $42 billion in 2016, yet India stood as the 10th most attractive destination in the world for FDIs. In comparison, China and Brazil received $139 billion and $50 billion FDI inflows respectively during 2016. The US remained the top source of FDI inflows in 2016 at $385 billion.

“Looking ahead, economic fundamentals point to a potential increase in FDI flows by around 10% in 2017,” Kituyi said. “However, significant uncertainties about the shape of future economic policy developments could hamper FDI in the short-term.”

Mauritius remained India’s top source of FDI inflows at $12.8 billion followed by Singapore at $7.1 billion during April-December period. Services sector continued to attract highest investment of $7.5 billion followed by telecommunications sector which attracted $5.5 billion inflows during the first nine months of the financial year 2016-17.