India Received Rs 5 Lakh Crore FDI In 2020; Becomes World’s 5th Biggest Recipient Of FDI!

As per a report by the United Nations, India has become the fifth largest recipient of inflows in the world, with as much as  USD 64 billion in Foreign Direct Investment in 2020. 

With USD 64 Billion In FDI, India Becomes Fifth Largest Recipient Of Inflows

The report, World Investment Report 2021, by the UN Conference on Trade and Development (UNCTAD) has also stated that there has been a drastic impact on the global FDI flows. Apparently, they have declined by 35 per cent in 2020 to USD 1 trillion, which was USD 1.5 in the trillion the previous year.

The investment projects and prospects of multinational enterprises (MNEs) to reassess new projects have been scaled down due to the investment projects.

As per the report, the FDI has increased by 27 per cent to USD 64 billion in 2020 which was USD 51 billion in 2019. This boost was possible because of the acquisitions in the information and communication technology (ICT) industry, therefore leading the country to be to the  fifth largest FDI recipient in the world.

The pandemic led to an increased dependency on digital  infrastructure and services on a global scale, therefore increasing the demand for same. This also resulted to an increased values of greenfield FDI project announcements targeting the ICT industry. Reportedly, there has been a 22 per cent increase, to USD 81 billion.

Second Wave Of Pandemic Hits India’s Economic Activities

As per the report, the second wave of the COVID-19 virus has had a huge impact on the country’s overall economic activities. The major project announcements in the ICT industry  also includes an investment of USD 2.8 billion by Amazon in ICT infrastructure in India.

The report states, “Yet India’s strong fundamentals provide optimism for the medium term. FDI to India has been on a long-term growth trend and its market size will continue to attract market-seeking investments. In addition, investment into the ICT industry is expected to keep growing.”

The pandemic and the lockdown imposed has had a severe impact main investment destinations such as Maharashtra, a state where there are some of the biggest automotive manufacturing clusters (Mumbai-Pune-Nasik-Aurangabad) and Karnataka (home to the Bengaluru tech hub).