FDI to India Drops by 43% in 2023, Ranked 15th Globally: UNCTAD

According to the United Nations Conference on Trade and Development (UNCTAD), foreign direct investment (FDI) to India in 2023 decreased by 43% compared to 2022, dropping India’s rank to 15th among global FDI recipients. This decline mirrors a global trend where overall FDI fell by 2%.

Global FDI Trends in 2023

The annual World Investment Report by UNCTAD highlights a general decline in FDI worldwide due to multinational companies’ cautious approach. Factors contributing to this decline include uncertain global growth prospects, economic fracturing, trade and geopolitical tensions, industrial policies, and supply chain diversification. International project finance, crucial for infrastructure development, dropped by 23%, while cross-border mergers and acquisitions fell by 46%.

FDI in Developing Regions

FDI to developing countries fell by 7% to $867 billion, with developing Asia seeing an 8% drop to $621 billion. Notably, FDI to China, India, West Asia, and Central Asia also declined. India’s FDI inflow in 2023 was $28 billion, down from $49 billion in 2022, resulting in its global FDI recipient ranking falling from 8th to 15th.

India’s FDI Performance in 2023

Despite the decline, India remained a significant player in attracting FDI for greenfield projects and international project finance deals. It ranked fourth in greenfield project FDI announcements and retained the second position for FDI in international project deals. However, India’s FDI outflows, which refer to investments by Indian companies abroad, saw an improvement, with the country ranking 20th, up from 23rd in 2022.

Top Ten FDI Recipient Countries in 2023

1. United States of America – $311 billion
2. China – $163 billion
3. Singapore – $160 billion
4. Hong Kong (China) – $113 billion
5. Brazil – $66 billion
6. Canada – $50 billion
7. France – $42 billion
8. Germany – $37 billion
9. Mexico – $36 billion
10. Spain – $36 billion
11. India – $28 billion

About UNCTAD

Established in 1964, the United Nations Conference on Trade and Development (UNCTAD) aims to promote trade, investment, and development in developing countries. Headquartered in Geneva, Switzerland, UNCTAD releases several key reports, including the World Investment Report, Trade and Development Report, and Digital Economy Report.