In the first half of 2018, India attracted $22 billion worth of Foreign Direct Investment, according to a UN report. The report also said that globally the foreign direct investment saw a drop of 41 percent in the same period due to tax reforms carried out in the U.S.
The UN Conference on Trade and Development (UNCTAD) said in its ‘Investment Trends Monitor’ report, which was released Oct.15, that with $22 billion FDI, India led the 13 percent rise in FDI in South Asia.
With the $22 billion FDI, India just about managed to stay in the top 10 host economies receiving the most FDI during the period, PTI reported.
With $70 billion, China was the largest recipient of FDI, closely followed by the UK which saw $65.5 billion investment. The third largest recipient of FDI was the U.S. with $46.5 billion. The Netherlands, Australia, Singapore, and Brazil received $44.8 billion, 36.1 billion, 34.7 billion, and 25.5 billion respectively, all higher than India, the news agency said.
Quoting the report, PTI said, FDI dropped by 41 percent globally in the first half of 2018 to $470 billion from $794 billion in the same period last year, mainly due to large repatriations by the U.S. parent companies of accumulated foreign earnings from their affiliates aboard following tax reforms by implemented by Donald Trump’s administration.
James Zhan, UNCTAD’s Director of Investment and Enterprise said, “the global financial picture is “gloomy.””
Zhan said there are other factors too that are responsible for the “huge difference in repatriation” of overseas profits by U.S. companies and these include ambiguity about the detail and impact of tax reform as well as the impact of trade disputes such as the tit-for-tat tariffs imposed by the U.S. and China.
The report said that while there has been a decline in foreign investment, there has also been a 42 percent increase in the so-called “greenfield” projects to $454 billion.