Foreign direct investment flow into India in 2013 increased 17 per cent to $28 billion, but its ranking among the top 20 attractive global destinations slipped one notch to 16.

According to the UN Conference on Trade and Development (Unctad) report for 2013, FDI during the year rose 11 per cent to $1.46 trillion which is the highest since the start of the global economic crisis in 2008.

Unctad forecasts that FDI flows will rise gradually in 2014 and 2015, to $1.6 trillion and $1.8 trillion, respectively, indicating that the worst may be over for the crisis-ridden global economy in terms of foreign investment flows. However, uneven levels of growth, fragility and unpredictability in a number of economies and risks related to the tapering of quantitative easing could dampen the FDI recovery, it warned.

Global FDI inflows in 2012 had shrunk 18 per cent to $1.31 trillion due to the weakening macroeconomic environment, slow growth in trade, GDP and employment.

India attracted FDI worth $27.3 billion in 2012 which was 13.5 per cent lower than $31.5 billion worth of FDI attracted in 2011.

The country, therefore, cannot afford to be complacent as the sharp rise in FDI inflows in 2013 was largely because of the base effect. It has to work harder to spring back to the 2011 levels.

Brazil, Russian Federation, India, China and South Africa, popularly known as the BRICS economies, accounted for 22 per cent of global FDI flows, which was nearly twice that of their pre-crisis level.

New high

FDI flows to developing economies reached a new high of $759 billion dollars, accounting for 52 per cent, during the year.

Developed countries, however, remained at an historical low of 39 per cent for the second consecutive year.

FDI inflows to developed countries increased by 12 per cent to $576 billion, with investments into the EU increasing, while those to the US going down.

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