CURRENT AFFAIRS
CURRENT AFFAIRS
Description
In a notable development, India has climbed to the 15th position among the top global destinations for Foreign Direct Investment (FDI) in 2024, according to the World Investment Report 2025 released by the United Nations Conference on Trade and Development (UNCTAD). This improvement in rank comes despite a slight decline in FDI inflows, which stood at $27.6 billion, compared to $28.1 billion in 2023.
About World Investment Report
The World Investment Report, published annually by UNCTAD, provides a comprehensive analysis of trends in global foreign direct investment. It evaluates FDI flows by region, sector, and country, while also examining policy measures that influence global investment patterns. The report plays a crucial role in guiding investment-related policymaking, especially in developing and emerging economies.
Key Highlights Of 2025 Report
Global FDI Trends
Global FDI inflows totaled $1.5 trillion in 2024, showing a 4% increase from the previous year.
However, this rise was largely driven by volatile financial conduit flows through select European economies that often act as transit hubs for investments.
Excluding such transitory flows, global FDI actually saw a decline of 11%, confirming the second straight year of downturn in productive capital investment worldwide.
FDI and Sustainable Development Goals (SDGs)
Investment in sectors critical to the SDGs such as infrastructure, clean energy, water, sanitation, and agrifood systems declined by 25–33% in developing countries.
The health sector was the only exception, witnessing growth in FDI, albeit from a small base.
The overall trend reflects the challenges developing nations face in mobilizing international finance for sustainable development.
Digital Economy Investment
Global FDI in the digital sector grew by 14% in 2024.
However, this growth was highly concentrated, with 80% of greenfield investments in the Global South going to just 10 countries, leaving many developing nations outside the digital transformation wave.
India’s Performance In Global FDI Rankings
Despite a minor dip in FDI inflows, India demonstrated strong resilience and upward momentum in several key indicators:
FDI Inflows
In 2024, India received $27.6 billion in FDI, slightly lower than $28.1 billion in 2023, but this marginal decline did not hinder India from moving up one spot globally to the 15th position, ahead of several larger economies.
Greenfield Projects
India ranked 4th globally in terms of greenfield project announcements, with 1,080 new projects in 2024.
Greenfield investments involve building new facilities from the ground up and are crucial for job creation and technology transfer, making this a positive indicator for India’s economic fundamentals.
International Project Finance
India also made significant strides in international project financing, ranking among the top five economies globally.
It secured 97 international project finance deals, indicating growing investor confidence in India’s long-term infrastructure and industrial prospects.
FDI Outflows
India’s outbound FDI also witnessed robust growth.
The country ranked 18th globally in FDI outflows in 2024, with $24 billion in investments abroad, rising from 23rd place in 2023, when outflows stood at $14 billion.
This increase reflects the expanding global footprint of Indian companies and their strategic investments across sectors worldwide.
Regional FDI Insights
Asia remained the top destination for FDI among developing regions, attracting $605 billion in total.
The continent accounted for 40% of global FDI and 70% of total FDI inflows to developing countries in 2024.
Within South Asia, India continued to be the leading recipient of foreign investment, maintaining its pivotal role in the region's economic landscape.
Africa witnessed a 75% surge in FDI, and South-East Asia achieved record levels of greenfield investments.
The United States remained the world’s top FDI destination, with inflows growing to $279 billion in 2024 from $233 billion in the previous year.
In contrast, China dropped to 4th place, with a 29% decline in FDI inflows, down from its previous 2nd position in 2023.
Conclusion
India's improved standing in the World Investment Report 2025 highlights its continued relevance as a major investment destination, especially amid global economic uncertainty. The country's ability to attract a high number of greenfield investments, maintain leadership in project financing, and expand its outward investments signals strong fundamentals, investor confidence, and a conducive policy environment.
As global capital flows become increasingly volatile, India’s structural strengths, large consumer base, digital infrastructure, and policy reforms are expected to continue drawing interest from global investors in the years to come.
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