How COVID-19 has changed the situation of investing internationally
Foreign direct investment (FDI)
inflows rose by 22 percent (YoY) to $58.37 billion from April to November 2020
which is deemed to be the highest for any fiscal year for the first 8
months, The Ministry of Commerce and Industry said on January 27th.
In addition, FDI equity inflows
received between April and November 2020 increased by 37% (YoY) to $43.85
billion. This is the largest FDI inflow for the first 8 months of any fiscal.
From April to November, 2019-20, it was US$ 32.11 billion.
FDI is an important source of
non-debt finance for the economic growth in India. It is one of the major
drivers of economic growth and development. The ministry said in a
statement that it was the government's initiative to put in place an
encouraging and investor-friendly FDI policy and remove the policy bottlenecks
that have hampered the inflow of investments in the country.
The Centre claimed that it is due to
the government's intervention on the fronts of FDI policy reforms, investment
facilitation and ease of doing business, stating the reason for the rise in FDI
The United Nations said earlier on
Sunday that FDI to India had increased by 13 percent in 2020, fueled by
interest in the digital market. Because of the COVID-19 pandemic, India and
China bucked up the odds. It also added that in major economies such as UK, the
US and Russia, fund flows declined very severely.
On Sunday, the United Nations
Conference on Trade and Development (UNCTAD) released an 'investment trends
monitor' reporting that global FDI dropped 42 percent in 2020 from $1.5
trillion in 2019 to an estimated $859 billion. It also noted that in the 1990s,
such a low was last seen and is more than 30 percent below the investment that
followed the global financial meltdown of 2008-2009.
UNCTAD in its report said, that South
Asia's FDI increased by 10% to $65 billion. It added that the overall foreign
investment for 2020 reached $57 billion, which recorded 13 percent
increase in FDI, and noted that the largest contributor to this increase was
acquisitions in India's digital economy.