Foreign Investment in India is Slipping

July 27th, 2011
in econ_news

FDI-1 Econintersect:  India was ranked 14th in the world for FDI (Foreign Direct Investment) in 2010 with a total of $25 billion.  This was down from $36 billion and 8th place in 2009. Foreign direct investment is investment of foreign assets into domestic structures, equipment, and organizations.  It does not include foreign investment into the stock markets.  FDI is considered much more durable investment (long-term) than equity investment.

Follow up:

From The Times of India:

In 2010, the report said, the US continued to be the largest recipient of FDI with $228 billion, followed by mainland China with $106 billion and Hong Kong with $69 billion. More than half of all global FDI inflows were into developing countries and transition economies. However, FDI in services in general and financial services in particular slumped during 2010.

FDI to South Asia declined to $32 billion, reflecting a 31% slide in inflows to India and a 14% drop in flows to Pakistan. By contrast, inflows to Bangladesh, "a rising low-cost production location", increased by nearly 30% to $913 million, the report said.

The global data is shown in the following graph from the UN report:


The total of all FDI in 2010 was slightly increased from 2009 (+5%) from $1.19 trillion to $1.24 trillion.  Both figures are well below the recent high of nearly $2 trillion in 2007.


Sources:  UN World Investment Report 2011 and The Times of India

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