FDI to India drops in 2023 by 43%, ranked 15th in world :UNCTAD

According to a report of the United Nations Trade and Development (UNCTAD),the foreign direct investment (FDI) to India in 2023 has dropped by 43 percent as compared to 2022. The report also said that the overall FDI in the world declined by 2 percent in 2023 as compared to 2022.

Among the top 20 FDI recipient countries in the world there has been a drop in the FDI inflow to  India, China, France, Australia, the United States of America.

Worldwide trend in FDI decline in 2023

The annual World Investment Report of the UNCTAD highlights the trends in the FDI worldwide, at the regional and country levels and emerging measures to improve its contribution to development.

The World Investment Report 2024 mentions that there has been a general decline in the FDI during 2023 due to the cautious approach adopted by the Multinational Companies (MNCs). 

It identifies uncertain global growth prospects, economic fracturing trends, trade and geopolitical tensions, industrial policies and supply chain diversification as a major factor in the decline in the investment by the MNCs.

International project finance, which is important for infrastructure development, declined by 23 per cent as compared to 2022.

The cross border merger and acquisitions of companies fell by 46 percent. Merger and acquisition is an important source of FDI for developing countries like India.

The FDI to the developing countries fell by 7 per cent to $867 billion. The FDI to developing Asia fell by 8 percent to  $621 billion. 

There was a rare decline in FDI to China. The FDI also fell in India, West Asia and Central Asia.

FDI in India during 2023

• According to the UNCTAD report the total FDI in India in 2023 was $28 billion as compared to $49 billion in 2022.
• India’s position as the top recipient of the global FDI fell from 8th in 2022 to 15th in 2023.
• India remained among the Top five countries of the world in attracting FDI in greenfield projects and international project finance deals. 
• India was ranked the fourth-largest recipient of FDI announcements in greenfield projects. It was ranked 3rd in 2022.
• India retained the second rank in the world for FDI in international projects deals. 
• As far as the FDI outflows are concerned, India was ranked 20th in the world. India was ranked 23rd in 2023.FDI outflow refers to the investment made by Indian companies outside India.

For the concept of FDI and its rules in India, Read here

Top Ten FDI recipient countries in the world in 2023 

According to the World Investment Report of the UNCTAD, the following are the top ten FDI recipient countries in the world.

United Nations Trade and Development (UNCTAD)

United Nations Trade and Development (UNCTAD) is a permanent organisation of the United Nations. 

The United Nations Trade and Development (UNCTAD) was established as the United Nations Conference on Trade and Development in 1964. 

In 2004 at its 60th anniversary, its name was changed to United Nations Trade and Development (UNCTAD).

The main aim of the UNCTAD is to promote trade, investment and development of the developing countries.

Headquarters: Geneva, Switzerland 

Reports released by UNCTAD

The UNCTAD also releases various reports. The important ones are :

• World Investment Report,
• Trade and Development Report,
• Digital Economy report,
• Review of Maritime Transport,
• Technology and Innovation Report.
• Commodities and Development Report,
• Least Developed Countries Report.