Even as most countries attracted less foreign direct investment last year, investment in India surged on hope its economy is set for take off.
Asia’s third-largest economy received $34 billion as FDI in 2014, according to report released Wednesday by the United Nations Conference on Trade and Development. That’s a 22% jump from the previous year, meaning India was the country that attracted the ninth largest amount of international investment last year. The year before the South Asian nation’s ranking was 15th.
Total global FDI fell 16% to $1.2 trillion during the year as a fragile global recovery and geopolitical risks hurt investor confidence. While much of Asia saw increased inflows, India was among the countries that showed the biggest increases.
“As an expected economic recovery gains ground, FDI inflows are likely to maintain an upward trend in 2015,” in India, the Unctad report said.
The government’s efforts, including Prime Minister Narendra Modi’s “Make in India” program aimed at attracting global companies to produce locally, are helping strengthen interest the country’s manufacturing sector, the report said.
Of course, India still has a lot of catching up to do with its regional competitor China. While FDI into China grew a much slower at 4% last year, it received close to four times the FDI India got.
China attracted $129 billion in 2014, helping it dislodge the U.S. as the highest FDI attracting nation.
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