US FDI in India Crosses $40 Billion Mark in 2020: Report

The Foreign Direct Investment (FDI) from the US to India has crossed the $40 billion mark till date this year. It shows the growing confidence of the US in the Indian companies. The figures were published by an India-centric business advocacy group.

The US-India Strategic and Partnership Forum has come out with the report that even during the COVID 19 pandemic, the confidence of the US companies has grown considerably in India. That is the reason when the global economy was fighting recession; India saw inflows of US FDI.

In recent weeks also, some top companies such as Facebook, Google, Walmart have pledged to invest $20 billion in India in various sectors. This shows the confidence of investors in India is very high. It is also a sign that the US companies are finding India as an alternative to China and they are moving out of China.

However, the US government has also stated that India is still playing like a protectionist economy and that needs to be stopped at the earliest if it is really serious about attracting FDI.

Foreign Direct Investment (FDI)

It is an investment in the form of a controlling stake in a company or ownership in a business in another country. It is different from Foreign Institutional Investment because here direct control is involved as compared to share market investment in case of FIIs. That is why FDI is considered more stable as compared to FII and FPI. FDI was allowed in India in 1991 under the Foreign Exchange Management Act. Singapore has topped the list of countries in terms of FDI in India in the last two consecutive years.

Month: Current Affairs - July, 2020