Nifty99000 100%

Sensex99000 100%

Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: 5.0
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: 4.0
Article rating: 3.0
Article rating: No rating
Article rating: 4.5
RSS

News

FDIs in India flat in 2016, but prospects bright: UNCTAD

Author: IANS/Thursday, June 8, 2017/Categories: Economy

FDIs in India flat in 2016, but prospects bright: UNCTAD

Foreign Direct Investments (FDI) in India remained almost flat in 2016, but the nation is expected to emerge as one of the top FDI destinations, according to the UN Conference on Trade and Development (UNCTAD).

The World Investment Report released by the UN agency in Geneva on Wednesday said that FDI rose by a paltry one per cent in 2016 to $44.486 billion from the $44.064 billion in 2015.

At the same time FDI by India elsewhere declined by about third from $7.572 billion in 2015 to $5.12 billion in 2016, the report said.

The signing of a tax treaty by the Indian and Mauritian governments in 2016 may be the reason for the fall in FDI outflows from India as it "might have contributed to reduced round-tripping FDI," it added.

Looking at the future, UNCTAD said that India would be the third top prospective destinations for FDI, after the US and China.

It said that in India "renewed policy efforts to attract FDI could contribute to an increase of inflows in 2017".

Twenty per cent of top executives of multinational enterprises (MNE) surveyed listed India as their top prospective host economy for 2017-19, it added.

UNCTAD, however added a note of caution: "Although new liberalization efforts continue to improve the investment climate in India, tax-related concerns remain a deterrent for some foreign investors."

The report did not give a specific figure for the brighter picture projected for India, but said that globally FDI was expected to rise moderately from $1.75 trillion in 2016 to 1.8 trillion in 2017 and $1.85 million in 2018.

After the two per cent slide in 2016, "the new, more optimistic projections for 2017 are attributed to higher economic growth expectations across major regions, a resumption of growth in trade and a recovery in corporate profits," it said.

However, according to UNCTAD Secretary-General Mukhisa Kituyi, "Although this report projects a modest increase for 2017, other factors such as the elevation of geopolitical risks and policy uncertainty may impact the scale of the upturn."

Analysing FDI into India, the report said: "Foreign MNEs are increasingly relying on cross-border M&As (mergers and acquisitions) to penetrate the rapidly growing Indian market."

It cited the $13 billion acquisition of Essar Oil by Russia's Rosneft and a consortium led by Singapore-based Trafigura as "the largest deal ever in the country".

Indian companies also made a big deal in the energy sector. Vankor India - a joint venture of Oil India Ltd, Bharat Petroleum Corp and Indian Oil Corp Ltd, headquartered in Singapore paid $2 billion to acquire 24 per cent of Vankorneft that is ultimately owned by Russian government's , Rosneftegaz. ONGC Videsh Ltd (India) paid $1.3 billion to get an additional 15 per cent of Vankorneft.

China is also an important source of FDIs in India going for "some large-scale investments in dynamic industries, such as smartphone production", it said.

OPPO, which set up a manufacturing facility in Noida in 2014, announced an investment of $216 million in Andhra Pradesh in 2016, according to the report. 

Huawei and Xiaomi "have also started to invest massively in India," it added.

Chinese investment in other areas are also growing apace, the report said, citing heavy-equipment manufacturer Sany Group's plans to invest $5 billion in India.

Print Rate this article:
No rating

Number of views (216)/Comments (0)

S Vijaykrishnan
S Vijaykrishnan

IANS

Other posts by IANS
Contact author

Leave a comment

Name:
Email:
Comment:
Add comment

Name:
Email:
Subject:
Message:
x

Videos

Ask the Finapolis.

I'm not a robot
 
Dharmendra Satpathy
Col. Sanjeev Govila (retd)
Hum Fauji Investments
 
The Finapolis' expert answers your queries on investments, taxation and personal finance. Want advice? Submit your Question above
Want to Invest
 
 

Categories

Disclaimer

The technical studies / analysis discussed here can be at odds with our fundamental views / analysis. The information and views presented in this report are prepared by Karvy Consultants Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Consultants nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time. Every employee of Karvy and its associate companies is required to disclose his/her individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Consultants Ltd. This report is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities, or any options, futures or other derivatives related to such securities.

Subscribe For Free

Get the e-paper free