India crosses $300 billion milestone

India has received over US $300 billion US Foreign Direct Investment (FDI) milestone between April 2000 and September 2016.
The cumulative FDI inflows during the period amounted to US $310.26 billion. With this, India firmly established its credentials as a safe investment destination in the world.

Key Facts

• 33% of the FDI came through the Mauritius route. India received US $101.76 billion dollar from Mauritius between April 2000 and September 2016.
• Top Destinations: Mauritius route is preferred by investors because they wanted to take advantage of India’s double taxation avoidance treaty (DTAA) with the island nation.
• Besides Mauritius, other big investors have been from Singapore, US, UK and the Netherlands.
• Sector wise: India’s services sector received maximum 18% of the cumulative equity FDI inflows. It was followed by construction development, computer software & hardware, telecommunication and automobile.
• Liberalisation of the FDI policy framework supplemented by major national development programmes such as Make in India, Skill India and Digital India besides increasing competitiveness, have made India the preferred choice for investors globally.

Global FDI Status

According to the World Investment Report 2016 released by UNCTAD, global FDI flows rose by 38% to $ 1.76 trillion. It is the highest level since the global economic and financial crisis began in 2008.  However, it still remains some 10% short of the 2007 peak. The FDI flows in 2016 are expected to decline by 10-15%, reflecting fragility of global economy, persistent weakness of aggregate demand, effective policy measures to curb tax inversion deals. Besides, elevated geopolitical risks and regional tensions may further amplify the expected downturn of FDI flows.

Month: Current Affairs - December, 2016