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FDI flows to India will go up: UNCTAD

Bucking worldwide trend, foreign direct investment flows into India will grow from last year's level, according to an official of United Nations Conference on Trade and Development.

''Worldwide FDI flows will decline this year - 25 per cent in developing and 31 per cent in developed countries - but India is one of the few countries where it will go up,'' Karl Sauvant, director, UNCTAD told UNI.

''In Asia, the FDI will decline by 12 per cent this year and only in India, Malaysia, Philippines and China it will increase,'' he said on the sidelines of a Asia Pacific Regional Seminar on investment.

''Hong Kong, Korea and Thailand will be the major losers this year as far as FDI is concerned,'' Sauvant, who is with division on investment, Technology and Enterprise Development of UNCTAD, said.

Last year, the FDI flows had gone down by around 50 per cent to $740 billion of which developing countries accounted for $200 billion.

''In 2002 this figure is expected to be $540 billion. The share of developing countries in this pie will be between $180 billion to $190 billion,'' Sauvant said.

''Earlier mergers and acquisitions accounted for large chunk of FDI in developed countries. But in the first nine months of 2002, FDI through this route has gone down by 45 per cent,'' he said.

The UNCTAD director said that next year too the worldwide FDI flows would not record a major recovery.

''FDI can contribute to the economic growth of a country. In Ireland, foreign companies account for 90 per cent of the country's exports, for China this figure is 49 per cent and India nine per cent,'' Sauvant said.

Sauvant said that with all countries competing to attract FDI, those with better economic fundamentals would be most successful.

UNI

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