World Investment Report 2015 UNCTAD: Main Conclusions

World Investment Report 2015 UNCTAD: Main Conclusions

Question: India has been among the top 10 recipients of FDI during 2014, as per the World Investment Report 2015 issued by UNCTAD. Discuss the main conclusions of this report.

• For the first time after 2008, India has gained a place among the top 10 recipients of FDI during 2014 as per the UNCTAD World Investment Report 2015.

• India reached the ninth rank in 2014 with 22% increase in FDI inflows to USD 34 billion.

• India was at the 15th position the two years before this.

• However, India is the only BRIC country which has not crossed the USD 50 billion a year FDI mark.

• Half of the top 10 FDI recipients in the world are developing economies such as Brazil, Singapore, China, Hong Kong and India.

• FDI inflows to China’s services sector was higher than its manufacturing sector.

• Global FDI reached 16% at USD 1.23 trillion in 2014 on account of hardships faced by the international economy, uncertainty in policy for investors and elevation of geopolitical risks, as per the new report.

• New investments have also been offset by large divestments.

• India dropped out of the leading 20 countries in outward FDI flows.

• Developing countries lost USD 100 billion in tax revenues on account of investors routing FDI via tax havens such as Mauritius.

• A strong case has been made for multilateral initiatives for addressing the issues.

• Report also recorded a massive surge in investments from China to every part of the world, especially India’s neighbouring nations.

• FDI inflows rose by 31% to USD 1.7 billion on account of rising Chinese FDI inflows in service.

• Country will also benefit from the China Pakistan Industrial Corridor and associated One Belt One Road Strategy.

• Chinese companies will invest USD 45.6 billion in Pakistan over the next few years namely USD 33.8 billion in electricity and USD 11.8 billion in transport infrastructure.

• China was the largest source of FDI for Sri Lanka; a China Sri Lanka FTA will also be signed in June 2015 apart from the Maritime Silk Route Economic Belt which will lead to growing amount of Chinese investment to flow to Sri Lanka.

Facts and Stats

• China was the topmost recipient of FDI in 2014 with USD 129 billion inflows.

• This was followed by Hong Kong which received USD 103 billion and US at USD 92 billion.

• The biggest surge in inflows during the year was observed by Hong Kong at 39%.

Russia did not remain in the top 10 as foreign investors exited the oil sector as well as other projects after west imposed sanctions on this nation.
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