World Investment Report 2024 – India’s FDI Falls 43% in 2023
Foreign Direct Investment (FDI) around the world went down by 2% in 2023 compared to 2022. The drop varies from country to country, with big drops seen in India, China, France, Australia, and the USA. The 2024 World Investment Report from the United Nations Conference on Trade and Development (UNCTAD) goes into great depth about this trend.
Decline in FDI to India
India saw a big drop in FDI. Inflows dropped from $49 billion the previous year to $28 billion in 2023, a 43% drop. India’s place in the world for FDI receipts dropped from eighth in 2022 to fifteenth in 2023 because of this change. Indian projects are still the most popular places for foreign project financing and new construction, even though the country’s economy is weakening.
What are the Causes of FDI Decline?
The general drop in FDI in 2023, according to UNCTAD, was caused by multinational companies (MNCs) being more careful. Uncertain global growth prospects, geopolitical tensions, economic fragmentation, strict industrial policies, and the ongoing diversification of supply lines are some of the main things that are causing this. These things have made people less likely to invest and made it harder for money to flow freely between countries.
Sector-Specific Impacts
The drop in FDI has had different effects on different industries. There was a 23% drop in international project finance, which is important for infrastructure, and a 46% drop in cross-border mergers and acquisitions. This last trend is especially important because mergers and acquisitions are key for FDI in emerging countries like India. FDI to poor countries has dropped by 7% to $867 billion, but the effects have been different in different areas. For more specifics, FDI to developing Asia dropped by 8%, reaching $4 billion. An unusual drop in FDI in China stands out, as do related trends in West and Central Asia.
Top 10 FDI Recipient Countries in 2023
| Rank in the world (2023) | Country’s name | FDI received (in Billion US dollars) |
| 1 | United States of America | 311 |
| 2 | China | 163 |
| 3 | Singapore | 160 |
| 4 | Hong Kong (China) | 113 |
| 5 | Brazil | 66 |
| 6 | Canada | 50 |
| 7 | France | 42 |
| 8 | Germany | 37 |
| 9 | Mexico | 36 |
| 10 | Spain | 36 |
| 15 | India | 28 |
About UNCTAD
The United Nations Trade and Development (UNCTAD) was founded in 1964 and given a new name in 2004. It is an official UN body. UNCTAD is an organization based in Geneva, Switzerland, whose goal is to promote trade, investment, and growth in developing countries. Its annual reports give lawmakers and investors around the world important information about trade and investment trends in different regions and around the world.
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Month: Current Affairs - June, 2024
Category: Economy & Banking Current Affairs