According to a UN report, major global companies have India as their third favored destination after China and US. It is expected that investment flows can increase by over 20% this year and the next.

The FDI (Foreign Direct Investment) flow in India has risen by 30% to around $32 billion in the year 2011. However there is still a long way to go as China had around $124 billion last year, while Brazil attracted nearly $67 billion and Russia $53 billion.

Nagesh Kumar, Chief Economist, United Nations Economic and Social Commission for Asia and the Pacific, while releasing the UNCTAD’s World Investment Report 2012 said, “The FDI inflows into India can go up by 20-25 percent this year and by about 20 percent next year, if the present trend continues”.

He added that FDI growth seems to be increasing in 2012 as Coca Cola and furniture maker IKEA recently announced to invest nearly $5 billion in the Indian market for a long term. Though India’s economic growth is currently at its slowest during the past nine years, its trends still compared favourably.

He said that investors are looking at India for a long term prospect and as a wide market in Asia’s third largest economy. He says, “Compared to many other places, India is doing better in terms of growth”.

According to the report, the worldwide FDI flows reached around $1.5 trillion which exceeded the pre-financial crisis average during 2011. Despite falling global economy, it is expected around $1.6 trillion this year. He added that global companies are waiting for the Euro zone to stabilize before investing their money.

Earlier this year India allowed full foreign ownership of single brand retailers, although late last year it backtracked on a plan to allow in foreign supermarkets.

Prime Minister Manmohan Singh recently took over the finance portfolio and talked about the need to address problems in insurance, mutual funds industries and taxation. Many investors are now hoping that the plan gets revived soon.

Source: The Times Of India

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