The United Nations Conference on Trade and Development (UNCTAD) in its 'Investment Trends Monitor' report has indicated that in South Asia, India attracted $22 billion of foreign direct investment (FDI) flows, contributing to the subregion’s 13 percent rise in FDI in the first half of 2018 (H1 2018). However, it also said that with the $22 billion FDI, India just about managed to make it to the top 10 countries that received the most FDI during the period.
According to the report, China emerged as the largest global FDI recipient, attracting an estimated $70 billion in inflows in the first half of the year, followed by the UK with $65.5 billion, the US with $46.5 billion, The Netherlands at $44.8 billion, Australia with $36.1 billion, Singapore got $34.7 billion and Brazil received $25.5 billion. It also disclosed that global foreign direct investment dropped by 41 percent in the first six months of this year, to an estimated $470 billion as against $794 billion in the same period of 2017, on the back of large repatriations by the US parent companies of accumulated foreign earnings from their affiliates aboard following tax reforms.
The report pointed out that the fall in global FDI is mainly owing to recent tax reforms implemented by US President Donald Trump's administration that led to big firms in the US to bring home earnings from abroad - principally from Western European countries. It also said that other factors have contributed to this year's ‘huge difference in repatriation’ of overseas profits by US multinationals. It noted that these include uncertainty about the detail and impact of tax reform and the potential impact of unresolved international trade disputes; such as the tit-for-tat tariffs imposed by the US and China. In contrast to the overall decline in foreign investment, it highlights a 42 percent increase in so-called ‘greenfield’ projects to $454 billion.
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