India Top Recipient of FDI from Within Commonwealth: Report

India has been named as the top recipient of foreign direct investment (FDI) from within the Commonwealth group of countries, and the second most lucrative source of investment in organization after the United Kingdom, according to a new trade review.

The report, titled “Commonwealth Trade Review 2018: Strengthening the Commonwealth Advantage,” includes data gathered by the Commonwealth secretariat, and shows India to be among the top five providers of intra-Commonwealth services trade, along with Australia, Singapore and the United Kingdom, and surpassing Canada. The report was released ahead of the Commonwealth Heads of Government meeting scheduled to be held in Britain  next week.

“Between 2005 and 2016, India remained the top recipient of greenfield FDI from the Commonwealth, more than doubling the amount it received over 10 years… India is the leading country for attracting greenfield FDI, not only from the Commonwealth but also from the world. In 2015, it overtook China for the first time as the biggest destination for greenfield FDI,” the report states.

Greenfield investments happen when a parent company or government starts a new venture by constructing new facilities outside the country where the parent company is headquartered.

As per the trade review, intra-Commonwealth exports of goods and services stood at $560 billion in 2016 and made up for 20 per cent of Commonwealth countries’ total trade with the world.

“Commonwealth member countries held about one-fifth of global FDI stock in 2016…10 members received more than 90 per cent of inflows between 2010 and 2016. The top five recipients were the UK, Singapore, Canada, Australia and India, in that order,” the report says, the Hindustan Times reported.

Commonwealth Asian members – Bangladesh, Brunei Darussalam, India, Malaysia, Pakistan, Singapore and Sri Lanka – accounted for 41.1 per cent of the combined total Commonwealth exports of goods and services in 2016, marking an increase from 31.4 per cent in 2005.

In Asia, the dominant contributors are India, Singapore and Malaysia, accounting for 38 per cent of total Commonwealth exports and 93 per cent of Commonwealth Asian exports.

“This underlines the growing significance of Commonwealth markets for many member countries,” the report said about the 53-member organization. “With world trade growth forecast to rebound in 2017-18, the Commonwealth appears on track to achieve $700 billion in intra-Commonwealth trade in goods and services by 2020, while proactive policy measures can trigger even greater gains,” it added.

With India’s rapidly growing economy, intra-Commonwealth trade is projected to reach $700 billion by 2020. The “dramatic rise” of intra-Commonwealth investment is driven by India, the report says, adding that the country also presents enormous potential across economic sectors from the application of digital technologies.

The Commonwealth Heads of Government Meeting, which will be attended by Indian Prime Minister Narendra Modi, is scheduled to be held in London and Windsor on April 19-20.