Foreign Direct Investment (FDI) flows to India declined 26 per cent in 2021 as against the previous year. It failed to record large mergers and acquisitions deals that happened in 2020, the United Nations Conference on Trade and Development (UNCTAD) data showed.
“FDI flows to India were 26 per cent lower, mainly because large M & A deals recorded in 2020 were not repeated,” according to UNCTAD’s Investment Trends Monitor published on 19 January.
Global foreign direct investment (FDI) flows reported a bounce back in 2021, surpassing the pre-pandemic levels. In 2020, it accounted for $929 billion in 2020, while in 2021 Global FDI flows exceeded 77 percent to an expected $1.65 trillion.
“Recovery of investment flows to developing countries is encouraging, but the stagnation of new investment in the least developed countries in industries important for productive capacities, and key Sustainable Development Goals (SDG) sectors – such as electricity, food or health – is a major cause for concern,” UNCTAD Secretary-General Rebeca Grynspan said in a statement.
Developed economies rose the highest by far, with FDI outstretching to an estimated $777 billion in 2021 – three times more than what is recorded in 2020, the report shows.
Europe noted a more than 80 per cent increase in FDI flows owing to large swings in conduit economies.
Inflows in the United States increased over two-fold to $323 thanks to a surge in cross-border mergers and acquisitions (M & As) that almost tripled in value to $285 billion.
Of the overall global FDI flows in 2021–$718 billion–, over $500 billion, that is more than 75% came in developed economies. Developing economies, especially least developed countries (LDCs), saw a slight uptick in terms of growth.
China recorded $179 billion of inflows–one-fourth of total FDI.
FDI flows in developing economies saw a jump of 30 per cent to nearly $870 billion, with growth picking up in East and South-East Asia (+20 percent), Latin America and the Caribbean region rebounding to pre-pandemic levels, and West Asia gaining.
Inflows in Africa also saw a jump. Most beneficiaries across the continent saw a slight uptick in FDI, while overall FDI inflows in the region doubled, inflated by a single intra-firm financial transaction in South Africa in the last six months of 2021.