India fifth-largest recipient of FDI in 2020, says UNCTAD
NEW DELHI -- India received US$64 billion in Foreign Direct Investment in 2020, the fifth-largest recipient of inflows in the world, according to a UN report which also says the second COVID-19 wave weighs heavily on India's overall economic activities but strong fundamentals provide "optimism" for the medium term.
The World Investment Report 2021 released by the UN Conference on Trade and Development (UNCTAD)on Monday, said global FDI flows had been severely hit by the pandemic, plunging in 2020 to US$1 trillion from US$1.5 trillion the previous year.
The report said that FDI into India has increased by 27% to US$64 billion in 2020 from US$ 51 billion in 2019, pushed up by acquisitions in the information and communication technology (ICT) industry
The pandemic had boosted demand for digital infrastructure and services globally, ethe UNCTAD report said. This led to higher values of greenfield FDI project announcements targetting the ICT industry, rising by more than 22% to US$81 billion.
Major project announcements in the ICT industry included a USD 2.8 billion investment by online retail giant Amazon in ICT infrastructure in India.
Announced greenfield projects in India contracted by 19% to US$24 billion, while the second wave in April 2021 could lead to a larger contraction in 2021.
The outbreak had severely hit main investment destinations such as Maharashtra, home to one of the biggest automotive manufacturing clusters (Mumbai-Pune-Nasik-Aurangabad) and Karnataka (home to the Bengaluru tech hub), the report said.
But India's strong fundamentals and its market size would continue to attract market-seeking investments, it said.