India is making the headlines for all the right reasons. At one end, our athletes are making the country proud by winning medals outside the country. Coming to the other end of the spectrum, Indian economy with respect to the foreign direct investment (FDI) has by far been good.
As per the report in Economic Times, India got more foreign inflows for the first time in two decades than China. Narendra Modi-led government sensibly took several steps to attract foreign investment and has helped restore mood of investors since it came to power in May 2014.
“With midyear data on greenfield FDI now in, 2015 looks to be a milestone year for India following its impressive performance in 2014,” the article in FT added quoting fDi Markets, a data service of the FT.
The government has disclosed several initiatives such as ‘Make in India’ and ‘Digital India’ to attract investors. Investors were convinced by this and have started taking interest in the country growth story. Growth is said to be one of the fastest in the world and several multilateral agencies stressed the fact that India remains as the X-factor among emerging economies.
“India has had a busy M&A calendar in 2018 and we will continue to see good traction in inbound M&As,” the publication tagged Kalpana Morparia, chief executive for South and Southeast Asia at JP Morgan Chase & Co as saying.
“Given India’s demographics, the e-commerce story, the way India has leapfrogged the several stages of the technological revolution, we expect a lot of activity in the technology and financial services space going forward,” Morparia added.
It has been learnt that China has by far been the top destination among emerging markets for global funds. However, this year there came a change as India saw 235 deals amounting to $37.7 billion, which is highest ever for the country, pipping China, the ET report said referring to data from Dealogic, a global M&A and capital markets data provider. It may be noted that the trade war between China and the US is seen as a primary reason for the FDI slowdown to China.
Talking about the biggest deal that steered FDI flows to India this year is ‘Walmart’s $16 billion buyout of Flipkart’ and the trade experts believe technology-driven consumer retail, as well as financial services spaces, are likely to see substantial M&A activity in the times to come.
“India is tracking well ahead of where it was at this time last year: it has more than doubled its midyear investment levels. attracting 530 billion by the end of June 2015 compared with 512 billion in the first half of last year,” the newspaper added.
‘Research from fDi Markets found 97 of 154 countries typically classed as emerging markets experiencing declines in capital expenditure on greenfield investment projects in the first six months of this year compared with the same time period last year,” it added.