This may be said as the growth saga at both ends for Indian economy. A report has said that India has become the second best destination for the FDI inflow in the world. At the same time, India has also emerged as the 3rd largest source of FDI outflows among Asian countries.
According to the World Investment Report 2007, India has become the second best preferred destination for Foreign Direct Investment in the world. China has been rated as the top most favored destination for the same purpose.
The report has rated India much better destination than Russia and Brazil for FDI. The Indian and Chinese markets have been rated as the top two most favored destinations for FDI purpose because of the large markets and the cheap labor the countries have. These are the two major factors that drive multinational companies to invest in Indian and Chinese markets.
The World Investment Report 2007 that was prepared by the United Nations Conference on Trade and Development’s (UNCTAD) World Investment Prospects for 2007-09, has put the United States next to China and India at third place in the list of preferred destination for FDI. However, the US has emerged as the biggest FDI recipient country in the world.
According to the report, released on Tuesday, India has become the 3rd preferred destination because of the foreign companies have largely showed interest in country’s unorganized and organized retail sector. India is working hard to get rid of poor infrastructure and implementing liberalization policies in different sectors including banking sector. At the same time, India is gaining strength in manufacturing sectors and petrochemical industries.
During the financial year 2006, India has registered a 153% rise in FDI inflows to $17 billion that placed it ahead of Thailand, Indonesia and South Korea in the list of preferred destinations for FDI. At the same time, India has also emerged as the fourth biggest FDI recipient in Asia next to China, Hong Kong and Singapore. The interests showed by multinational giants such Wal Mart, Posco, Vodafone and other auto giants have placed India at the second place in the list.
At the same time, India has also emerged as the third biggest source of FDI outflow from Asia next to Hong Kong and China. It became possible because of the Tata’s $11 billion acquisition of Corus this year. India has overtaken other asian countries such as Singapore, Taiwan, South Korea and Malaysia for FDI outflow from Asia to other destinations.