World Investment Report 2019

The World Investment Report 2019 released by the UN Conference on Trade and Development (UNCTAD) makes the following observations:

• The global Foreign Direct Investment (FDI) flows slid for the third consecutive annual decline by 13 per cent in 2018 to USD 1.3 trillion from USD 1.5 trillion in 2017.
• Asia region was the world’s largest FDI recipient with 39 per cent of global inflows in 2018, up from 33 per cent in 2017.
• FDI inflows to developing countries in Asia increased by 3.9 per cent to USD 512 billion in 2018. The growth was witnessed mainly in China, Hong Kong, Singapore, Indonesia and other ASEAN countries, as well as India and Turkey.
• South Asia witnessed an increase in FDI inflows by 3.5 per cent to USD 54 billion.
• FDI to India grew by 6 per cent to USD 42 billion in 2018 owing to strong inflows in the manufacturing, communication and financial services sectors, and cross-border merger and acquisition activities.
• India and the UAE which are not traditionally in the top 20 outward investor countries were considered as among the top 10 most important sources of FDI for the 2019 to 2021 period.
• Strong economic fundamentals in the Asian subregion will continue to attract market-seeking FDI.
• Developing and transition economies capture 45 per cent of all innovation-related FDI.

The contraction in FDI flows was largely attributed to United States multinational enterprises (MNEs) repatriating earnings from abroad, making use of tax reforms introduced by the country in 2017.