India has become the fifth-largest recipient of inflows
According to the World Investment Report 2021, by UN Conference on Trade and Development, FDI flows globally have been hit severely because of the Pandemic. From 1.5 trillion last year, they have dropped to 1 trillion this year. A drop by 35%!
Covid 19 forced the governments to do a complete lockdown in countries all over the world which have severely hit the world economy. Investments projects have slowed down, which led a lot of big corporations to reassess their projects.
In the year 2020, FDI to India increased by 27 per cent since 2019. The lockdowns instilled a need to grow businesses digitally, a lot of digital startups came into existence.
One of the major investment is done by Amazon where Amazon has invested USD 2.8 billion in the ICT industry. The second wave of covid-19 has weighed way more on the Indian economy than the first wave.
Maharashtra, Karnataka, Bengaluru have faced major disruptions in their working habits including investment delays and project cancellations.
“India has quite strong fundamentals that provide optimism that things will get back at their fast pace soon. India’s huge market size will continue to attract investments from around the world.” the report said.
Export-related manufacturing has been the priority of the investment sector. Although it will take a while to recover, the government’s intervention can help. The Production Linked Incentive scheme, which has been designed to attract the manufacturing and export-related investments can bring the investors back to this sector. Through the Robust ICT system, they have managed to grow significantly digitally amid the pandemic.”
The large investments included the acquisition of Jio platforms by Jaadhu. Jaadhu is a subsidiary of Facebook. They took it over for 5.7 billion.
Tower Infrastructure Trust has also been acquired by Canada’s Brookfield Infrastructure. Another big feat was Unilever India’s merger with GlaxoSmithKline Consumer Healthcare India, (a subsidiary of GSK United Kingdom).
Because of the country’s free trade agreement, Investments are expected to rise in India by 2021. The uncertainty around India that whether the covid would now end is still there. The regions that struggle with Cobid are still under substantial downfall risk, but India’s large market size would continue to attract investments.