Macroeconomic uncertainties major concern for investors in India: UNCTAD

The Economic Times , Wednesday, June 25, 2014
Correspondent :
NEW DELHI: India's macroeconomic uncertainties remain a major concern for investors even as the country saw a 17% increase in foreign direct investment (FDI) to $28 billion in 2013, the United Nations Conference on Trade and Development (UNCTAD) has said in its latest World Investment Report.

"India experienced a 17% increase in FDI inflows in 2013... but macroeconomic uncertainties remain a major concern for investors. The opening up of multibrand retail in 2012 has not generated the results that were expected," the report released on Tuesday said.

India has slipped from the second most favoured investment destination in 2005 to fourth position in 2014. The country's ranking as a FDI recipient has, however, remained unchanged, at 14.

Finance secretary Arvind Mayaram said India would prefer the FDI route over portfolio flows if overseas resources were needed to spur economic expansion to its potential.

"I believe our potential growth rate is 8%. And, to get there we need to develop resources. And, what we cannot generate domestically must come from outside and if it comes from outside, then we will prefer it in the form of FDI rather than foreign institutional investment," Mayaram said while releasing the report.

Indian economy expanded at 4.7% in 2013-14, second straight year of sub-5% growth. Asia continued to be the world's top recipient region of FDI in 2013, accounting for nearly 30% of global inflows.

Outflows from the region slid by nearly three-fourths to a paltry $2 billion, owing to the prolonged decrease of outflows from India. After a sharp fall in 2012, FDI activity by the world's 39 developed economies recovered in 2013, albeit marginally in the case of outflows.

The annual publication highlighted that developing countries faced a wide gap in meeting their investment requirements and suggested a new framework to meet these goals.

Total investment needs in developing countries alone range from $3.3 trillion to $4.5 trillion per year for basic infrastructure (roads, rail and ports; power stations; water and sanitation), food security (agriculture and rural development), climate change mitigation and adaptation, health, and education, according to the report.

The report noted that the potential establishment of the Bangladesh-China-India-Myanmar Economic Corridor and the China-Pakistan Economic Corridor were likely to accelerate infrastructure development by attracting foreign investment in related countries.

 
SOURCE : http://economictimes.indiatimes.com/news/economy/foreign-trade/macroeconomic-uncertainties-major-concern-for-investors-in-india-unctad/articleshow/37147828.cms?prtpage=1
 


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