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FDI growth in 2020: India big reason in Asia bucking global trend

China, Hong Kong, India and the United Arab Emirates have defied the global trend to register growth in foreign direct investment (FDI) flows in pandemic hit 2020, says the just released World Investment Report 2021 of United Nations Conference on Trade and Development (UNCTAD).

In a year when global FDI flows dropped by 35 per cent to $1 trillion, from $1.5 trillion in 2019, FDI flows to developing countries in Asia - led by the four countries - increased by 4 percent to $535 billion, reflecting resilience amid global FDI contraction, the report said.

"Despite the pandemic, FDI to and from the region remained resilient in 2020. Developing Asia is the only region recording FDI growth, accounting for more than half of global inward and outward FDI flows," said UNCTAD's director of investment and enterprise, James Zhan.

"FDI prospects in 2021 for Asia are more favourable than the global average, because of recovery in trade, manufacturing activities and a strong GDP growth forecast," he added.

Within the region, FDI in South Asia rose by 20 percent to $71 billion, driven mainly by a 27 percent rise in FDI in India to $64 billion. The report attributed robust investment in ICT (Information and Communications Technology) and construction for rise in India's FDI inflows. India's cross-border M&As also surged 83 percent to $27 billion, with major deals involving ICT, health, infrastructure and energy.


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