21st June 2021
India: Fifth largest recipient of FDI in 2020
Recently, the World Investment Report (WIR) 2021 was released by the UN Conference on Trade and Development (UNCTAD).
- The WIR focuses on trends in foreign direct investment (FDI) worldwide, at the regional and country levels and emerging measures to improve its contribution to development.
Key Highlights of World Investment Report 2021
- The global FDI flows have been severely hit by the pandemic and they plunged by 35 per cent in 2020 to USD 1 trillion from USD 1.5 trillion the previous year.
- The pandemic boosted demand for digital infrastructure and services globally.
- It has led to higher values of Greenfield FDI project announcements targeting the ICT industry, rising by more than 22 per cent to USD 81 billion.
- The report said that the FDI in South Asia rose by 20 per cent to USD 71 billion, driven mainly by strong M&As in India.
- The FDI outflows from South Asia fell 12 per cent to USD 12 billion, driven by a drop in investment from India.
- India ranked 18 out of the world’s top 20 economies for FDI outflows, with 12 billion dollars of outflows recorded from the country in 2020 as compared to 13 billion dollars in 2019.
- The FDI inflows to developing Asia grew by 4 per cent to USD 535 billion in 2020, making it the only region to record growth and increasing Asia’s share of global inflows to 54 per cent.
- The report added that FDI inflows in Asia are expected to increase in 2021, outperforming other developing regions with a projected growth of 5-10 per cent.
India’s performance as FDI recipient
- India received USD 64 billion in Foreign Direct Investment in 2020 making India the fifth largest recipient of inflows in the world.
- The report highlighted that the FDI increased 27 per cent to USD 64 billion in 2020 from USD 51 billion in 2019.
- The increase in FDI was pushed up by acquisitions in the information and communication technology (ICT) industry.
- The major project announcements in the ICT industry included a USD 2.8 billion investment by online retail giant Amazon in ICT infrastructure in India.
- The investments from India are expected to stabilise in 2021, supported by the country’s resumption of free trade agreement (FTA) talks with the European Union (EU) and its strong investment in Africa.
UNCTAD
- It is a permanent intergovernmental body established by the United Nations General Assembly in 1964.
- Its headquarters are located in Geneva, Switzerland.
- It is part of the UN Secretariat.
- It reports to the UN General Assembly and United Nations Economic and Social Council.
- Its primary objective is to formulate policies relating to all aspects of development including trade, aid, transport, finance and technology.
House Price Index (HPI)
Recently, the Reserve Bank of India (RBI) released its quarterly house price index (HPI) for quarter 4 of 2020-21.
Key Highlights
- It based on transaction-level data received from housing registration authorities in ten major cities i.e. Ahmedabad, Bengaluru, Chennai, Delhi, Jaipur, Kanpur, Kochi, Kolkata, Lucknow and Mumbai.
- It says that all-India HPI increased (year-on-year) by 2.7 per cent in Q4 of 2020-21 as against 3.9 per cent growth a year ago.
- HPI growth showed large variation across major cities, from an increase of 15.7 per cent (Bengaluru) to a contraction of (-) 3.6 per cent (Jaipur).
- The all-India HPI growth rate moderated to 0.2 per cent in the fourth quarter of 2020-21 on a sequential (quarter-on-quarter) basis.
House Price Index (HPI)
- It is compiled quarterly by the Reserve Bank of India (RBI) for ten major cities.
- The cities are Mumbai Delhi, Chennai, Kolkata, Bengaluru, Lucknow, Ahmedabad, Jaipur, Kanpur, and Kochi.
- The average house price index representing all-India house price movement is also compiled based on these city indices.
- The indices are based on the official data of property price transactions collected from registration authorities of respective state governments.
- The HPI is a weighted average Laspeyres index based on the transaction price, where transactions are stratified into three categories i.e. small, medium and large houses and in different geographical wards/zones.
- The city-wise indices are averaged using the population proportion to total as the weight to obtain an all-India index.
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- The punishment shall not be less than ten years but which may extend to twenty years and shall also be liable to fine which shall not be less than one lakh rupees but which may extend to two lakh rupees.
- It also provided that the court may, for reasons to be recorded in the judgment, impose a fine exceeding two lakh rupees.
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