New Delhi: India received $64 billion foreign direct investment (FDI) in 2020. According to a United Nations report, India has become the fifth largest country in the world in terms of foreign investment.
The report said that the second wave of the Covid-19 affected the overall economic activity in the country, but its strong fundamentals provided optimism in the medium term.
The World Investment Report 2021, released by the UN Conference on Trade and Development (UNCTAD), said that global FDI flows have been badly hit by the pandemic and plunged by 35% in 2020 to $1 trillion from $1.5 trillion the previous year.
FDI Increase By 27% In 2020
According to the report, the worldwide lockdown due to Covid-19 has slowed down existing investment projects and the prospects of recession have forced multinational enterprises to re-evaluate new projects.
At the same time, FDI in India increased by 27% to $64 billion in 2020. Whereas in 2019 it was $51 billion. With acquisitions in the Information and Communication Technology (ICT) industry, the country has become the fifth-largest recipient of FDI in the world.
Demand For Digital Infrastructure & Services
The pandemic boosted demand for digital infrastructure and services globally. This led to the higher value of greenfield FDI project announcements to the ICT industry, rising by more than 22% to $81 billion. Announcements of major projects in the ICT industry also included an investment of $2.8 billion by Amazon in India.
$71 Billion FDI In South Asia
The report said that FDI in South Asia increased by 20% to $71 billion. Amid India’s struggle to contain the COVID-19 outbreak, robust investment through acquisitions in ICT (software and hardware) and construction boosted FDI. At the same time, FDI in China increased by 6% to $149 billion. Some of the largest economies in Asia, such as China and India recorded FDI growth in 2020, while the rest recorded a decrease.