Pay-off time for Modi: India displaces US, China as the top FDI destination in 2015
The FT report will help the government answer the criticisms on frequent foreign tours made by Modi and also the slow pace of some of the much-needed reforms
Prime minister Narendra Modi has got a return gift as he came back from the two-nation tour - India has become the top destination for FDI in the world.
With $31 billion of foreign capital inflows, India has surpassed China and the US to take the pole position in attracting largest FDI in the first half of 2015, a report in The Financial Times said on Tuesday.
The report titled "India grabs investment league pole position" was forwarded by the Finance Ministry, according to a PTI report. The report has come just as Modi has concluded his tour of Ireland and the US. He is slated to visit the UK in November.
The FT report said India has attracted $31 billion of FDI in the first half of 2015, ahead of $28 billion of China and $27 billion of the US.
"A ranking of the top destinations for greenfield investment (measured by estimated capital expenditure) in the first half of 2015 shows India at number one, having attracted roughly $3 billion more than China and $4 billion more than the US," the FT report said.
The report also said the country is in the pole position to pass both China and US in FDI flows this year as it has outperformed others in economic growth, bucking the apparent slowdown in emerging markets.
"With midyear data on greenfield FDI now in, 2015 looks to be a milestone year for India following its impressive performance in 2014," the report said.
India is tracking well ahead of where it was at this time last year: it has more than doubled its midyear investment levels, attracting $30 billion by the end of June 2015 compared with $12 billion in the first half of last year.
India's achievement this year is particularly significant, considering that 97 of the 154 countries that are counted as emerging markets are seeing a decline in capital spend year on year in greenfield projects, the report pointed out.
The report said that in 2014 India ranked fifth in terms of capital investment, after China, the US, the UK and Mexico.
"In a year when many major FDI destinations posted declines, India experienced one of 2014's best FDI growth rates, increasing its number of projects by 47%," it said.
That year India saw a capital inflow of $24 billion, while China topped with $75 billion and the US at the second slot with $51 billion. The UK with a $35 billion capex was the thrid and Mexico ($33 billion) the fourth.
For sure, the FT report will help the government answer the criticisms on frequent foreign tours made by Modi and also the slow pace of some of the much-needed reforms. The officials are already projecting the report as a stamp of approval for the various measures taken by the government over the last one year.
“In the past one year, the government has initiated a number of measures to improve the investment climate and ease of doing business. Several policy initiatives and reforms have also been undertaken. The higher FDI inflows are reflective of the growing positive sentiment about India as an investment destination,” economic affairs secretary Shaktikanta Das has told the Business Standard.
With inputs from PTI
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