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FDI inflows fell 9% in 2017: UNCTAD
Why in the news ?
- According to the latest World Investment Report, 2018, released by the United Nations Conference on Trade and Investment (UNCTAD), India’s foreign direct investment (FDI) outflows more than doubled in 2017 to $11.3 billion while FDI inflows fell 9% to $40 billion during the year.
More on news
- The drop in FDI inflows happened despite India having one of its largest FDI deals as Petrol Complex Pte Ltd (Singapore), owned by Rosneftegaz (Russian Federation) acquiring a 49% stake of Essar Oil Ltd, the second largest privately owned Indian oil company, for $13 billion
- An investor group including eBay Inc. (US), Microsoft Corp. (US) and Tencent Holdings (China) acquired a stake in Flipkart Internet for $1.4 billion.
- SoftBank Group Corp. (Japan) acquired a 20% stake in One97 Communications Ltd, which runs Paytm, for $1.4 billion.
- Among overseas foreign investments made by Indian companies, state-owned oil and gas company Oil and Natural Gas Corp. Ltd (ONGC) bought a 15% stake in an offshore field in Namibia from Tullow Oil (founded in Ireland and headquartered in the United Kingdom) in 2017.
- By the end of 2017, ONGC had 39 projects in 18 countries, producing 285,000 barrels of oil and oil-equivalent gas per day.
FDI
- Foreign direct investment (FDI) is an investment made by a company or individual in one country in business interests in another country, in the form of either establishing business operations or acquiring business assets in the other country, such as ownership or controlling interest in a foreign company.
- Foreign direct investments are distinguished from portfolio investments (FPI) in which an investor merely purchases equities of foreign-based companies.
- The key feature of foreign direct investment is that it is an investment made that establishes either effective control of, or at least substantial influence over, the decision making of a foreign business.
- The ability to attract large scale Foreign Direct Investment (FDI) into India has been a key driver for policy making by the Government.
- India has already marked its presence as one of the fastest growing economies of the world. It has been ranked among the top 10 attractive destinations for inbound investments.
- Since 1991, the regulatory environment in terms of foreign investment has been consistently eased to make it investor-friendly.
- Now we will have a look at those eased norms, the new FDI rules for various sectors.
Source
The Mint, Investopedia.