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Date - 21st Jun 2021

India received $ 64 billion in foreign direct investment, according to the 2021 World Investment Report prepared by the United Nations Conference on Trade and Development (UNCTAD) on June 21, 2021. This makes India the fifth-largest recipient of inflows to the World. The UN report, however, says the second wave of COVID-19 is seriously affecting the country's overall economic activity, but its strong foundations are "optimistic" in the medium term.

UN report on global flows of foreign direct investment

The World Investment Report 2021 notes that global FDI flows were hit hard by the pandemic and fell 35 percent in 2020 to $ 1 trillion from $ 1.5 trillion in 2019.

The report says that global lockdowns due to COVID-19 have slowed existing investment projects, and the outlook for a recession has forced multinational enterprises (MNEs) to reevaluate new projects.

UN report on FDI flows in India

FDI inflows to India increased by 27 percent to $ 64 billion in 2020, from $ 51 billion in 2019, the report says. This makes India the fifth largest recipient of FDI in the world. Inflows were boosted by acquisitions in the information and communication technology (ICT) industry.

In addition, he noted that the pandemic has increased the demand for digital infrastructure and services around the world.

This has led to an increase in the number of announcements of new FDI projects targeting the ICT industry. The number of such ads grew by more than 22 percent to $ 81 billion. Some of the big project announcements in the ICT industry included $ 2.8 billion in investments by online commerce giant Amazon in India's ICT infrastructure. These states, like most others in India, have been under a strict ban since April 2021.

What will boost FDI in Asia?

The report says that signs of a rebound in trade and industrial production in the second half of 2020 provide a solid foundation for FDI growth in 2021. The economies of East and Southeast Asia and India are projected to continue to attract foreign investment in high-tech industries, given their market size and their mature digital and technology ecosystem.

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