World Investment Report

India’s rank jumped one notch to 7th position among top recipients of foreign direct investment (FDI) in the 2021 calendar year, according to the United Nations Conference on Trade and Development (UNCTAD).

Details –

Despite FDI inflows in the country declining, India’s rank jumped one notch to 7th position among top recipients of foreign direct investment (FDI) in the 2021 calendar year, according to UNCTAD’s latest World Investment Report.

What is ‘Foreign Direct Investment’?

Foreign direct investment (FDI) is an investment from a party in one country into a business or corporation in another country with the intention of establishing a lasting interest. With FDI, foreign companies are directly involved with day-to-day operations in the other country.

Major Highlights of the ‘World Investment Report’ —

• The World Investment Report focuses on trends in foreign direct investment (FDI) worldwide, at the regional and country levels and emerging measures to improve its contribution to development.
• As per the latest report, top 3 FDI destinations in the world are —
  • • United States ($367 billion),
    • China ($181 billion) and
    • Hong Kong ($141 billion)
• UNCTAD said global FDI flows recovered to pre-pandemic levels in 2021, growing 64 per cent to $1.6 trillion.
• UNCTAD foresees that the growth momentum of 2021 cannot be sustained and that global FDI flows in 2022 will likely move on a downward trajectory, at best remaining flat.
• India’s Scenario —
  • • Among the top 10 host economies for FDI, only India saw a decline in its FDI inflows.
    • FDI inflows to India declined to $45 billion in 2021 from $64 billion in 2020.

About UNCTAD –

• United Nations Conference on Trade and Development (UNCTAD), permanent organ of the United Nations (UN) General Assembly, established in 1964 to promote trade, investment, and development in developing countries. Headquartered in Geneva, Switzerland, UNCTAD has approximately 190 members.
• Negotiations at UNCTAD’s meetings resulted in the Global System of Trade Preferences (1988), an agreement that reduced tariffs and removed or reduced non-tariff trade barriers among participating developing countries; the Common Fund for Commodities (1989), an intergovernmental financial institution that provides assistance to developing countries that are heavily dependent on commodity exports; and various agreements for debt relief.
• In the 1990s UNCTAD’s efforts were directed toward the challenges globalisation poses to developing countries, and special attention was focused on measures to help the poorest and least developed countries become integrated into the world economy.
• The highest policy-making body of UNCTAD is the Conference, which meets once every four years to set policy guidelines and to formulate a program of work. The UNCTAD Secretariat, whose members form part of the UN Secretariat, performs policy analysis, monitors and implements the decisions of UNCTAD’s intergovernmental bodies, and provides for technical cooperation and exchanges of information.
• It comprises four divisions—on globalisation and development strategies; international trade; investment, technology, and enterprise development; and services infrastructure—as well as the Office of the Special Co-ordinator for Least Developed, Land-locked, and Island Developing Countries (OSC-LDC). The Trade and Development Board, UNCTAD’s executive body, is responsible for the operations of the organisation when the Conference is not in session.
• Reports –
  • • Trade and Development Report
    • Trade and Environment Review
    • World Investment Report
    • Least Developed Countries Report