FDI flows to India grew 6% in 2018 to $42 bn: UN report

India slipped a rank to end at tenth place in the latest ranking of top foreign direct investment receiving countries for the year 2018, according to the latest edition of the World Investment Report of the United Nations Conference on Trade and Development (UNCTAD).

According the report released on Wednesday, India received $42 billion in FDI in 2018, a growth of 6%.

China, which retained the number two position, received the highest foreign inflows among the developing countries at all time high of $139 billion, a growth of 4%.


Manufacturing, communication and financial services – were the top three recipients of inflows in India. Growth in cross-border M&As to $33 billion in 2018 from $23 billion in 2017 was primarily due to transactions in retail trade, which includes e-commerce, and telecommunication, it said.

The report mentioned the acquisition of Flipkart, country's biggest e-commerce platform, by Walmart and telecommunication deals involving Vodafone and American Tower amounting to $2 billion. It highlighted the changes to the FDI policy introduced for the ecommerce sector terming the changes restrictive. “In February 2019, India introduced several restrictive changes in its FDI policy for e-commerce in order to safeguard the interests of domestic offline retailers,” the report said.

Tata Motors entered the top hundred list of multilateral enterprises of the UNCTAD.

Global FDI slips
Global FDI slipped by 13% in 2018, to US$1.3 trillion from $1.5 trillion the previous year – the third consecutive annual decline, according to UNCTAD’s World Investment Report 2019.

“FDI continues to be trapped, confined to post-crisis lows. This does not bode well for the international community’s promise to tackle urgent global challenges, such as abject poverty and the climate crisis ,” UNCTAD Secretary-General Mukhisa Kituyi said.

The contraction was largely precipitated by the US multinational enterprises repatriating earnings from abroad, making use of tax reforms introduced by the country in 2017, designed for that purpose, the report noted.

“Geopolitics and trade tensions risk continuing to weigh on FDI in 2019 and beyond,” he added.

In South Asia over all FDI inflows increased by 3.5% to $54 billion, the report said adding that all subregions could receive higher flows.

"All subregions in developing Asia are expected to receive higher inflows. Prospects are underpinned by a doubling in value of announced greenfield projects in the region, suggesting continued growth potential for FDI," it said while sounding a note of caution on global uncertainties.

It said uncertainties stemming from global trade tensions could weigh on the mood in the region.