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India’s FDI Rank Rises to 7th Position

Published on June 10, 2022
Current Context: According to the United Nations Conference on Trade and Development, India jumped one position to 7th among the top recipients of foreign direct investment compared to 2021.
India’s FDI Rank Rises to 7th Position
  • As per UNCTAD, even FDI inflows into India declined to $45 billion in 2021 from $64 billion in the preceding year. But still, it retains at 7th position. While the United States with $367 billion remained the top recipient of FDI, China with $181 billion and Hong Kong with $141 billion also retained second and third positions respectively.
  • Among the top 10 host economies, only India saw a decline in its inflows. However, outward FDI from India rose 43% which amounts to $15.5 billion in 2021.
  • It has been observed that in the recent past multinational enterprises of the US targeted India in 8% of deals, mostly buying minority stakes to gain access to the market and to local innovative solutions.
  • The report also stated that global FDI flows recovered to pre-pandemic levels last year, growing 64% to $1.6 trillion but the prospects this year are weak as the business and investment climate has changed dramatically due to the war in Ukraine resulting in a triple crisis of high food and fuel prices and tighter financing.
  • It has also been forecasted that the growth momentum cannot be sustained, still, global FDI flows in 2022 will likely move on a downward trajectory, and remains flat.
  • As per the report, FDI flows to developing economies rose 30%to $837 billion the highest level ever recorded largely due to strength in Asia, a partial recovery in Latin America and the Caribbean, and an upswing in Africa.

Question:

Q.1 As per UNCTAD FDI inflows into India declined to _________ in 2021?
a. $30 Billion
b. $45 Billion
c. $50 Billion
d. $35 Billion
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