FDI grows by 13 pc in India amid pandemic

At a time when the global economy is facing one of the worst crisis due to coronavirus pandemic, investors prefered to invest in developing countries rather than developed countries.

Business Desk, ETV Bharat: Foreign Direct Investments in India recorded a growth of 13 per cent to $57 billion in 2020 on account rising investments in the digital economy, said a report by UNCTAD.

The report highlighted that cross-border M&A in India grew 83 per cent to $27 billion. A notable deal was the acquisition of 10 per cent of Jio Platforms by Jaadu, owned by Facebook, which was valued at $5.7 billion. Infrastructure and energy deals also propped up M&A values in India, the report added.

At a time when the global economy is facing one of the worst crisis due to coronavirus pandemic, investors prefered to invest in developing countries rather than developed countries.

Developing economies like China and India accounted for 72 per cent of the global FDI-- the highest share on record, according to the report.

China was the largest recipient of FDIs with 4 per cent increase to $ 163 billion on the backdrop of return to positive GDP growth and government's investment facilitation programme.

In contrast to an increase in country's FDI, global FDI in 2020 fell by 42 per cent to an estimated $859 billion from $1.5 trillion in 2019.

In a massive blow to the United States, the country recorded a 49 per cent drop in FDI, falling to an estimated $139 billion, mentioned the report.

Europe also saw a decline in FDIs by two-thirds to -4 billion in which UK's FDI fell to zero.

James Zhan, director of UNCTAD’s investment division said, “The effects of the pandemic on investment will linger. Investors are likely to remain cautious in committing capital to new overseas productive assets.”