From big FDI recipient to major foreign investor: India may soon enter top 20 outbound FDI club


Even though not an outward investor country traditionally, India may soon become one of the top 20 global sources of foreign direct investment (FDI), shows a report by a UN body. It may enter the league as early as the end of 2019, the report on international FDI flows by United Nations Conference on Trade and Development said. Along with India, UAE is also expected to be for the first time among the top 10 FDI sources for 2019 to 2021 period, the report added.  The investment into the other economies stood at $11.03 billion in 2018. The amount just more than doubled to $11.14 billion in 2017 from $5.07 billion in 2016, the data also showed.

India has seen a series of major investment into other countries in the last few years including ONGC’s purchase of 15 per cent stake in an offshore field in Namibia from Tullow Oil, headquartered in the UK. IT major Infosys had also announced the acquisition of 75 per cent stake in a subsidiary of Dutch bank ABN AMRO.

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The most likely sources for outward foreign direct investment are the US and China, the report said. The UK, Germany and France were among the next most important sources of FDI. In terms of FDI flows into India, the investments rose to 6 per cent in 2018 to $42 billion from 9 per cent in 2017. However, India’s rank as a source country for FDI fell one rank to 10th position, as Spain outpaced India.

The flows of global FDI declined 13 per cent in 2018 to $1.3 trillion, from $1.5 trillion in the last year. It is the third annual decline in a row, according to the report. “FDI continues to be trapped, confined to post-crisis lows. This does not bode well for the international community’s promise to tackle urgent global challenges, such as abject poverty and the climate crisis ,” UNCTAD Secretary-General Mukhisa Kituyi said.

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