According to a United Nations report, the Indian economy could be the “most resilient, in the long run. Despite delayed economic growth post COVID, the Indian market will see positive growth. This positive growth and India’s enormous market size would lay the groundwork for drawing in huge investments.
The United Nations Economic and Social Commission for Asia and the Pacific’s report titled “Foreign Direct Investment Trends And Outlook In Asia And The Pacific 2020/2021” showed that India had accounted for 77 percent of the inflows in 2019.
Although FDI flows in South and South-West Asia witnessed a fall from USD 67 billion to USD 66 billion in 2019, a 2 % fall, India gained a sizable contribution from the FDI, receiving USD 51 billion in 2019, which is a 20% hike from 2018.
Information and Communications Technology (ICT) and the construction of the sub-sector attracted the most contributions; national brands in the E-commerce sector have also secured major investments.
The FDI outflow from South and South-west Asia has aided steady growth for the past four years; an increase from USD 14.8 billion in 2018 to USD 15.1 billion in 2019, suggests the report. However, India and Turkey have a massive share in the FDI outflow. India alone has contributed 80% to total FDI outflow and has invested 12.1 billion in 2019 toward FDI, which is a whopping 10% increase from 2019.
The report also indicates a drop in FDI inflows and outflows in South and South-west Asia. This declining trend can be noted through the fall in greenfield FDI by 43% for the first three quarters of 2020 when contrasted with the first three quarters of 2019.
Factors like large market size, the central attraction of global venture capital firms and IT giants, business process management, and electronic companies will give India a competitive advantage against its South Asian neighbors.
