FDI: India among top 10 destinations in 3rd world

NEW DELHI: India has emerged as among the ten major developing country recipients of foreign direct investment but still lags far behind its neighbour China in terms of FDI inflows received, a UN report has said.

FDI inflows to India stood at $ 5.5 billion in 2004, making it the tenth largest developing economy in terms of overseas investment received, according to UNCTAD's Trade and Development Report 2006.

China led the pack with $ 60.6 billion of FDI inflows, followed by Hong Kong with $ 34 billion dollars and Mexico with $ 18.7 billion, the United Nations Conference on Trade and Development (UNCTAD) said.

Developing countries across the world received $ 275 billion of FDI in 2004, of which the share of the top ten was
$ 189.8 billion.

However, India did not figure among the top ten developing countries with the largest FDI inward stock. Hong Kong had a FDI stock of $ 456.8 billion, China $ 245.5 billion and Mexico $ 182.5 billion.

UNCTAD said the absolute amount of FDI inflows did not give a clear picture of the importance of impact of foreign investment in a country and compared FDI inflows to the GDP.

Inward stock of FDI in India as a percentage of Gross Domestic Product has risen to 5.9 per cent in 2004, from just 0.5 per cent in 1990, indicating the growing importance of overseas investment in the country's economy.

China, on the other hand, saw its FDI stock as a percentage of GDP grow to 14.9 per cent in 2004, as against 5.8 per cent in 1990, the report observed.