FDI inflows into India down to $28 billion in 2023: UN

Chennai: The FDI inflows into India saw a 43 per cent decline in 2023 at $28 billion, while the global foreign direct investments dropped 2 per cent to $1.3 trillion, as per the data of UNCTAD.

In 2023, India witnessed FDI inflows of $28,163 million against $49,380 million in 2022. In 2020, the country had received FDI inflows of $64,072 million and in 2021, the inflows had declined to $44,763 million.India’s decline was mostly responsible for the decrease in FDI inflows to South Asia, said UNCTAD.

FDI outflows from India also saw a dip of 8.7 per cent to $13,341 million against $14,618 million in 2022. In 2021, the FDI outflows had touched $17,253 million.

At the end of 2023, India has FDI inward stocks of $536,930 million against $510,703 million in 2022. FDI outward stocks have gone up from $222,628 million in 2022 to $235,956 in 2023.

Foreign investment flows to developing Asia receded in 2023. At $621 billion, they accounted for 45.6 per cent of global FDI inflows in 2023 against 50 per cent in 2022.

Developing economies in Asia saw significant increase in greenfield foreign direct investment (FDI). In 2023, these economies experienced a 44 per cent rise in the overall value of greenfield investment announcements and a 22 per cent increase in the number of such announcements.

Cross-border mergers and acquisitions (M&A), which usually constitute 10 to 15 per cent of foreign investments in developing Asia, declined by almost $30 billion to $57 billion in 2023. This decline accounted for about half of the total drop in FDI inflows to the region.

China and its Hong Kong Special Administrative Region (SAR) continued to be the largest investors in the region by total FDI stock, followed by the United States, Japan, and Singapore.

Meanwhile, global FDI fell by 2 per cent to $1.3 trillion in 2023 amid an economic slowdown and rising geopolitical tensions. FDI flows to developing countries dropped 7 per cent to $867 billion.

While prospects for 2024 remain challenging, UNCTAD finds modest growth for the year remains possible, citing easing financial conditions and investment facilitation efforts in both national policies and international agreements.