India, China to carry Asian region as FDI destination: Moody's

NEW DELHI: India and China, which outperformed other countries in attracting FDI in 2009, are likely to continue leading the Asia-Pacific region as foreign investment destination, research firm Moody's said.

Though flows declined in both the countries during the year, the fall was less than elsewhere, it added.

India's inward FDI dropped by 14 per cent in 2009 and that of China by 12 per cent. The drop in global inward FDI was 37 per cent last year.

"China and India are likely to carry the region (Asia-Pacific) forward as an FDI destination, Tine Olsen, Economist with Moody's Analytics said.

A recent UNCTAD report also outlines China and India as the top destinations for FDI flows in 2010-2012.

"Continued economic expansion in these major economies is vital, both for generating FDI within the Asia-Pacific region and from elsewhere in the world," Olsen said.

Investments, particularly FDI, fell off sharply during the global recession.

The credit crunch, lower corporate earnings, and economic uncertainty kept businesses shy of risking capital during the downturn, the research firm said.