FDI declines to $40 billion in 2017 from $44 billion in 2016: UN report

Foreign Direct Investment (FDI) to India decreased to $40 billion last year from $44 billion in 2016 while outflows from India, the main source of investment in South Asia, more than doubled, according to a new trade report by the UN.

According to the World Investment Report 2018 by the UN Conference on Trade and Development (UNCTAD) global foreign direct investment flows fell by 23% in 2017, to $1.43 trillion from $1.87 trillion in 2016.

“Downward pressure on FDI and the slowdown in global value chains are a major concern for policymakers worldwide, and especially in developing countries,” UNCTAD secretary-general Mukhisa Kituyi said. FDI to India decreased from $44 billion in 2016 to $40 billion in 2017. But outflows from India, the main source of FDI in South Asia, more than doubled to $11 billion, the report said.

The report cited India’s stateowned oil and gas company ONGC’s active investment in foreign assets in recent years. After acquiring a 26% stake in Vankorneft, an affiliate of Russia’s national oil company Rosneft PJSC, in 2016, ONGC bought a 15% stake in an offshore field in Namibia from Tullow Oil in 2017.

By the end of 2017, ONGC had 39 projects in 18 countries, producing 285,000 barrels of oil and oil-equivalent gas per day, the report said.

The report said that crossborder merger and acquisitions sales for India rose from $8 billion to $23 billion driven by a few large deals in extractive and technology related industries. Singapore’s Petrol Complex, owned by Russia’s Rosneftegaz acquired a 49% stake of Essar Oil Ltd, the second largest privately owned Indian oil company, for $13 billion.

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