NEW DELHI: India received $64 billion in Foreign Direct Investment in 2020, the fifth largest recipient of inflows in the world, says the latest report from the UN Conference on Trade and Development (UNCTAD).India had received $ 51 billion in 2019. FDI was pushed up by acquisitions in the information and communication technology (ICT) industry. Major project announcements in the sector included a $ 2.8 billion investment by online retail giant Amazon in infrastructure and Unilever India’s merger with GlaxoSmithKline Consumer Healthcare India, a subsidiary of GSK United Kingdom.
The report, however, pointed out that investment in greenfield projects in India has fallen and that the second wave may lead to a further contraction. “The second wave in India weighs heavily on the country’s overall economic activities. Announced greenfield projects in India contracted by 19 per cent to $24 billion, and the second wave in April 2021 is affecting economic activities, which could lead to a larger contraction in 2021,” says the World Investment Report 2021. The second wave, it said, severely hit top investment destinations such as Maharashtra, which is home to one of the biggest automotive manufacturing clusters, and Karnataka with production disruption and investment delays.
On a positive note, the report says that strong fundamentals provide optimism for the medium term and that investments from India are expected to stabilise in 2021 supported by the resumption of free trade agreement (FTA) talks with the European Union (EU) and strong investments in Africa.The report also notes that overall global FDI flows have been severely hit by the pandemic, plunging 35 per cent in 2020 to $1 trillion from $1.5 trillion the previous year. It added that FDI inflows into Asia are expected to increase in 2021, outperforming other developing regions, with a projected growth of 510 per cent.