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Larry Fink , the chairman and CEO of world’s largest fund manager BlackRock, said that India will be a better investment destination over China for global investors for at least coming two years before the latter moves to the next phase of growth. “If I could only invest in one out of the two at this moment, then it would be India for at least next two years. But once China connects the hinterland and establishes connectivity between factories, then it may reach a level that is substantially faster than their current GDP,” said Fink. India’s GDP grew 8.9% vis-a-vis China’s 10.3 in the second quarter of the current financial year.

Fink, who heads BlackRock that has more than $3.45 trillion assets under management, was in Mumbai recently after a whirlwind tour of San Francisco, Melbourne and Sydney. Commenting on the pullback by foreign institutional investors ( FIIs )) in the preceding few weeks, Fink said it was a temporary move and Indian equities still remain an attractive bet. “I really don’t pay attention to these short term moves. The Indian market was up quite a bit so it’s a reset. I think that the northern Africa situation, food price inflation and some governance issues have eroded confidence.” he said.

Fink said investments in US equities will definitely grow as the economy recovers, but the emerging markets investments will not suffer. “I think systematically investors are underweight on the US. And I think that US investors are systematically underweight on global equities. But I believe that emerging markets are compelling places to be in. I think that dynamics of India are as strong today as they were earlier. It might be a good time to get back into the market place,” he said.

Asked whether the political uncertainty, governance issues, and coalition friction make global investors like him nervous, Fink said investors come with eyes open. “It’s part of India. If things were perfect, we make no returns, because everything will be easy to invest in. People focus on these data point and don’t see the long term macro trends. To my perspective India would be an even better place to invest if we had a dialogue between business and government.”

Fink is also not too worried about the developments in Egypt that were giving jitters to the markets globally. “In all probability, it might go to the other extreme. Once things happen everyone focuses on the negatives. I am not saying that it may not happen; I believe that the markets are more volatile because that could be an option. But the fact is Egypt has tasted democracy, and it is a much more open society than many other North African and Middle Eastern societies. People are looking for faster, more robust change. People are looking for more openness. They are not having this revolution to say we want to move more backwards,” he said.

On the topic of US recovery, Fink, considered one of the most influential men in the Wall Street in the post-bailout scenario, said recovery will be strong. On the back of positive numbers coming from manufacturing data, job and hardening bond rates, US economy seems to be turning around. “We think the US economy will continue to grow because of its exports. I don’t believe a 4-5 % economy but confident about 3%. US economy did more constructive destruction than any other economy. We restructured our banking system. Around November and December CEOs started investing and then we began to see changes in the behaviour of executives. They started spending more money, hiring more people, setting new offices, setting more factories, buying inventories. This started building momentum. Quantitative easing (QE2) by the Fed gave economy a push further that accelerated the stock market which accelerated the behaviour of CEO,” says Fink.

"There is some weakening in the last few months in the FDI. . That’s the area of my greatest concern. “I am very worried about euro zone. So. surged 72 per cent to USD 15. India remains an attractive destination for investment.. Ahluwalia said India needed FDI to bridge the rising current account deficit. The other problem is negative demographics.. land acquisition issues and lack of quality infrastructure. representing the difference of inflows and outflows of foreign exchange. "We have current account deficit (CAD). Besides. reflecting uneven pace of global recovery.." It said the widening of CAD is a result of factors like lower growth in services receipts.and moderation in FDI inflows reportedly because of environment sensitive policies. the composition of capital flows poses sustainability risks. I see it to be a continual problem for several years. ". Planning Commission Deputy Chairman Montek Singh Ahluwalia said here today. many investors' decisions were postponed. 11. he said. India's FDI inflows declined 26 per cent to USD 18..PTI India attractive FDI destination despite some slowdown: Montek DAVOS: India remains an attractive investment destination despite some slowdown in Foreign Direct Investment (FDI) last year.17PM IST.However. compared to USD 25. India's central bank RBI said in a recent report. there has been a significant rise in imports relative to exports -. 29 Jan.. 2011. We need to finance our deficit. I don’t see many happy outcomes in Europe. they can’t grow themselves out. It added that although larger net capital inflows were absorbed in financing higher CAD.reflecting steep rise in international crude oil prices -." The country's CAD.” he says. Europe remains a cause for worry for the fund manager. Due to the financial crisis in 2008 and 2009.9 billion. The economy is very well poised to absorb a higher current account deficit for a couple of years but this cannot remain a persisting trend. They can’t adjust the economy by currency so they have a structural problem that is very severe.5 billion in the same period last year.2 billion in the same period last year due to higher imports. external commercial borrowings by India Inc and external assistance. Higher capital inflows were due to big investments in capital markets by foreign funds. adding. barring capital movements..the external sector needs to be monitored closely. During January-November 2010.” But for the man considered by many to be the best brains on risk in the Wall Street sees India a safe bet." Ahluwalia told the global CEOs who have gathered at the Alpine resort for the 41st World Economic Forum ( WEF )) meeting. So.. “I don’t see anything disrupting the long term trend in India.8 billion in the July-September quarter over USD 9. "We welcome long-term investments".

However. we may not see any big inflows into the country. .” said Partha Mukhopadhyay of the Centre for Policy Research. The growth has been attributed to further opening up of telecommunications.India 2nd preferred FDI destination Bs Reporter / New Delhi September 25. Indonesia and even Guatemala. More than a quarter of 300 international retailers told Unctad that they have either opened their first store in India during 2007 or are planning to do so in the near future. The report also mentions a survey by the Japan Bank for International Cooperation (JBIC). “It is possible that the projected FDI inflows may not happen in 2009-09 and get deferred to the next fiscal.73 per cent over $ 19. which stood at $22. as well as increasing cross-border merger and acquisitions. Foreign direct investment (FDI) inflows into the country will continue to show the robustness seen in the past couple of years despite the global financial crisis that many feel will impact economies across the world. an increase of 6.” said Unctad’s policy expert Premila Nazareth Satyanand. India was also recognised as the fourth-largest source of FDI in Asia. Fujian . 2010-2012 World Investment Prospects Survey. The report. Fujian province. 2008. but above Germany and Taiwan. a report by the United Nations Conference on Trade and Development (UNCTAD) said on Tuesday. lagging only behind China. as against $ 12. it could be said that the Indian government’s FDI target of $35 billion for 2008-09 can be achieved. China remains top FDI destination By Zhou Siyu (China Daily) Updated: 2010-09-09 11:10 Large Medium Small Comments(0) Print Mail XIAMEN. India is bridging the gap with Singapore as a destination for FDI inflows. the United Nations Conference on Trade and Development (Unctad) has said in World Investment Report 2008. single-brand retail. However.64 billion abroad in 2007. other experts believe that the global liquidity crunch may impact FDI inflows into the country.23 per cent.” added Satyanand.84 billion in the previous year.95 billion. in which Japanese transnational manufacturing companies have rated India higher than China for establishing business operations. translating into a growth of 16. “Going by my personal interactions with industry. as Indian companies invested $13. which is below that of Hong Kong. “Significantly. who released the report in India today. India received the fourth largest amount of FDI inflows in 2007 (after China.China remains the most popular destination for foreign direct investment (FDI) in the world. Hong Kong and Singapore). 0:24 IST India has retained its position as the second most-preferred global location for foreign investment in 2008 and will continue to do so till 2010. but other sectors are likely to see enough growth.66 billion in 2006. Inflows may be low for sectors like infrastructure. was released at the 2010 UNCTAD World Investment Forum (WIF) in Xiamen. Within Asia. The report also points that India has improved its ranking in the inward FDI performance index (which measures the flow of foreign investment into a country relative to its GDP) from 110 in 2006 to 106 in 2007.

next only to the United States. During the same seven-month period. Chinese minister of commerce. as the world economy is still shaky from the financial crisis. FDI volume dropped 39 percent last year. That is the fundamental reason why the foreign businesses felt the investment environment is deteriorating. for the next two years China will likely remain the largest destination of FDI worldwide and will likely emerge as the second largest country for outbound direct investment (ODI). and the next two years are likely to see a stable increase in FDI volume. China's FDI increased by more than 20 percent year-on-year. In his opinion. Russia and India all made the top 5." said Chen Deming. Earlier this year.9 percent compared with last year. . The survey also predicts worldwide FDI will pick up as the world economy gradually recovers from the financial crisis. for the first seven months of this year. on the sidelines of 2010 UNCTAD World Investment Forum. According to official statistics. Worldwide. the large inflow of FDI indicates China's investment environment is only getting better and better. to $58. Of the top 15 most popular FDI destinations. and the acute criticism gave rise to doubts that China may lose its attractiveness as an FDI destination. China's investment environment was criticized as deteriorating. up 17. "Chinese domestic businesses became more and more competitive over these years. "but China's FDI only decreased by 2.3 billion. the number of foreign companies increased by more than 14. given the widespread vocal concern about China's investment environment. according to figures released by UNCTAD.400. nine are developing countries.According to the survey." said Chen. Brazil. Ironically. more and more FDI is flowing into China.6 percent.

only a to "China's FDI this year is expected to reach $100 billion. ODI ver ag FDI will bring not only technologies and products into China. like high-tech. ViceAt Wif en." Chen said at the round table meeting. ag still ed e: Chen said. said Chen. he added. nt is im Meanwhile. and with more and pro ver FDI flowing in there is more mis room for improvement. China will take measures to increase FDI in sectors that produce rke high-value added commodities. part of WIF. an 11-percent growth year-on-year. me par n ent Over ma the next two or three years. and na' s At the round table meeting." Chen said.Rel ate d rea din gs: The year 2009 is the 18th In Sp consecutive year that China ves eci tor has been the largest FDI al s Co recipient. as well as service sectors. in President Xi Jinping said China is dedicated to creating a "more open and optimized" investment tra Xia ns environment for foreign businesses. Chen also proposed to leaders and officials from 200 countries that inv est investment policy should be made in such a way that FDI could be better channeled into me developing countries. and emphasized China intends to continue attracting FDI while enlarging its own Co volume. And pu sh China's ODI is expected to increase to more than $50 billion. trade protectionism is one of the problems Chinese businesses frequently encountered pro in vintheir ODI. Cifi mo t re and op the opening ceremony of the UNCTAD 2010 World Investment Forum (WIF) on Tuesday. with the rest going to the vir on developed countries. more t S In the ministerial round table meeting on Tuesday afternoon. nt en "China's ODI will mainly focus on developing countries and regions. but such conduct will C hin harm the world's economic recovery and push the jobless rate higher. The world economy will have little room to improve if FDI steers clear of the me developing and less developed countries. g Trade protectionism could be implemented on the pretext of national security. Chen welcomed FDI from pei all cal over the world. Chen said. for wa rd WT O talk . but advanced management expertise e: Chi more talent.

By Nagesh Narayana | January 6. 2010 Related Articles Copper Drops as Inflation Concerns Grow Silver Gains on Inflation Concerns and Tight Supply FDI in China surged 23 pct in January Related Topics • • • • • • • China Manufacturing Japan Thailand India Emerging Markets Rare Earth Subscribe to The Economic Monitor Top of Form . overtaking China. View Full Image Reuters Indian Prime Minister Manmohan Singh (L) talks with Japanese Prime Minister Naoto Kan in Tokyo October 25. India for the first time topped the list as the most attractive destination. 2011 9:08 AM EST In an annual survey conducted by the Japan Bank for International Cooperation.

The new ranking was made in the 22nd survey carried out by JBIC in 2010. Must Read Top 10 Celebrity Death Hoaxes Five Best Pound-for-Pound MMA Fighters Sponsorship Link Profitable forex trading .only 5 minutes a day . data and anlaysis . and China's move to delay exports of rare earth minerals.ibtime Research_w eb_f 1001 Email Bottom of Form Subscribe to The Economic Monitor to get the day's most relevant news. which is in vogue since 1992. elicits the views of Japanese companies which have invariably preferred China over India and gave the fillip to Shanghai that rose to prominence since the mid-90s. Sample The survey. The reason for China lagging behind was attributed to increasing labor cost and recent anti-Japan protests in China in the wake of the boat incident in the Senkaku islands in September. said a release on Thursday.em-us-free email done http://w w w .

6 per cent.2 per cent.Japanese foreign investment and companies "are increasingly turning their attention to such (emerging) markets as India and Vietnam. transfer of technology and expertise. Vietnam at 32. Last year.com/articles/98235/20110106/india-tops-japan-s-fdi-destinationsurvey. Direct investment excludes investment through purchase of shares.2 per cent. It usually involves participation in management. The survey conducted in the summer of 2010 shows that 74.ibtimes. The survey reflects increasing aversion among the Japanese manufacturers to invest in China due to some frequent strikes last year in Chinese auto manufacturing units followed by bitter diplomatic row between the two nations over the disputed Senkaku islands in the East China Sea which both claim Read more: http://www. But in short term say over next three years. and Brazil at 24.htm#ixzz1EDF5p8Lk Foreign direct investment From Wikipedia. while 71. joint-venture.7 percent chose China.[1] Contents [hide] . China still tops the list with 77. Thailand at 26." JBIC economist Toshiharu Mimura told Kyodo News agency. which is the cumulative number for a given period.9 percent of the 605 Japanese companies selected India as their investment destination over the next 10 years.3 percent of the respondents being positive with India at 60.5 percent. the free encyclopedia Jump to: navigation. There are two types of FDI: inward foreign direct investment and outward foreign direct investment. China was in the first position followed by India. search Foreign direct investment (FDI) or foreign investment refers to long term participation by country A into country B. resulting in a net FDI inflow (positive or negative) and "stock of foreign direct investment".

$ 206.69 $ 2.81 + $ 246. The figure below shows net inflows of foreign direct investment in the United States.23 bn $ 907.$ 122.47 99 bn $ 40. mines and land.93 bn .79 bn $ 329. The largest flows of foreign investment occur between the industrialized countries (North America.• • • • • • • • • • • 1 History 2 Types 3 Methods 4 Global Foreign Direct Investment 5 Foreign direct investment in the United States 6 Foreign direct investment in China 7 Foreign direct investment in India 8 Foreign direct investment and the developing world 9 See also 10 References 11 External links [edit] History FDI is a measure of foreign ownership of productive assets.04 bn + $ 81. Western Europe and Japan).421.629.18 bn $ 5. US International Direct Investment Flows:[2] Perio d FDI Outflow FDI Inflows Net + $ 37. such as factories.74 07 bn bn bn Total $ 2.$ 1. But flows to non-industrialized countries are increasing sharply.13 bn 69 1970.88 .27 89 bn 1990.72 79 bn 1980.05 $ 1.34 bn 2000.31 + $ 207.703. Increasing foreign investment can be used as one measure of growing economic globalization.$ 122.$ 950.950.96 bn + $ 43.13 bn 1960$ 42.

trust or other social institution. or any combination of the above.bn bn bn [edit] Types A foreign direct investor may be classified in any sector of the economy and could be any one of the following:[citation needed] • • • • • • • • an individual. a public company or private company. a group of related individuals.Export Processing Zones Bonded Warehouses Maquiladoras investment financial subsidies soft loan or loan guarantees free land or land subsidies relocation & expatriation subsidies job training & employment subsidies . an incorporated or unincorporated entity. a group of related enterprises. [edit] Methods The foreign direct investor may acquire voting power of an enterprise in an economy through any of the following methods: • • • • by incorporating a wholly owned subsidiary or company by acquiring shares in an associated enterprise through a merger or an acquisition of an unrelated enterprise participating in an equity joint venture with another investor or enterprise Foreign direct investment incentives may take the following forms:[citation needed] • • • • • • • • • • • • • low corporate tax and income tax rates tax holidays other types of tax concessions preferential tariffs special economic zones EPZ . a government body. an estate (law).

3 billion in FDI flowed into the United States in 2008.[citation needed] Foreign companies have in the past supported an annual US payroll of $364 billion with an average annual compensation of $68.• • • infrastructure subsidies R&D support derogation from regulations (usually for very large projects) [edit] Global Foreign Direct Investment UNCTAD said that no significant growth of Global FDI. FDI has resulted in 30% of jobs for Americans in the manufacturing sector. which in turn has led to high living standards.1 trillion stock of FDI in the United States at the end of 2008 is the equivalent of approximately 16 percent of U. The figures was 25 percent below the pre-crisis average between 2005 to 2007.[5] Affiliates of foreign corporations spent more than $34 billion on research and development in 2006 and continue to support many national projects. In 2010 was $1. which accounts for 12% of all manufacturing jobs in the US. over 4000 new projects and 630. gross domestic product (GDP).[citation needed] Increased US exports through the use of multinational distribution networks.55 Benefits of FDI in America: In the last 6 years. Provide support both at local and state levels.[citation needed] Unarguably.122 billion and in 2009 was $1.[3] [edit] Foreign direct investment in the United States "Invest in America" is an initiative of the US Department of Commerce and aimed to promote the arrival of foreign investors to the country. resulting in close to $314 billion in investment.[6] . Carrying out maneuvers to aid foreign investors. Offering policy guidelines and helping getting access to the legal system.114 billion. which is a 37 percent increase from 2007. The United States is the world’s largest recipient of FDI.000 new jobs have been created by foreign companies. The $2.000 per employee.S. US affiliates of foreign companies have a history of paying higher wages than US corporations. Inward FDI has led to higher productivity through increased capital.[4] The “Invest in America” policy is focused on: • • • • • Facilitating investor queries. More than $325. Address concerns related to the business environment by helping as an ombudsman in Washington DC for the international venture community.

the lowest in 2010 fiscal. India.S. and job opportunities. industry department data released showed. South Korea.33 billion in the previous fiscal.33 billion. respectively. Mauritius. China and India are World’s Top Two FDI Destinations: UN Survey Bookmark This Email This Post Print This Post Sept. meanwhile. 2010 has again seen investments increase. and Singapore benefited from investment abroad. the sectors which attracted higher inflows were services. Foreign direct investment in August dipped by about 60 per cent to USD 1. As per the data.88 billion was lower by five per cent from USD 27. the US and the UK were among the leading sources of FDI. telecommunication.[citation needed] Even though there was a slight dip in FDI in 2009 as a result of the global slowdown. [7] [edit] Foreign direct investment and the developing world Foreign investment can be a significant driver of development in poor nations. The World Prospectus Survey 2010-2012 was released yesterday by the United Nations Conference on Trade and Development (UNCTAD). Singapore. China has continued its massive growth and is the leader among all developing nations in terms of FDI. FDI in China has grown to over $300 billion in the first 10 years. The Commitment to Development Index ranks the "development-friendliness" of rich country investment policies. in addition to an increase in the transfer of skills. [edit] Foreign direct investment in India A recent UNCTAD survey projected India as the second most important FDI destination (after China) for transnational corporations during 2010-2012. showing that China has once again retained title of the world’s most important FDI destination. Many of the East Asian tigers such as China. .[edit] Foreign direct investment in China Starting from a baseline of less than $19 billion just 20 years ago. Malaysia. construction activities and computer software and hardware. economy continues to struggle. 7 – A recent survey of transnational corporations found that companies see China and India as the world’s first and second most important destinations for foreign direct investment over the 2010 to 2012 period. technology. It provides an inflow of foreign capital and funds. overtook the United States to claim the survey’s second spot as the U. FDI for 2009-10 at USD 25.

2 indicating an increase between 10 percent and 30 percent. Dec 09.The figure below shows the top priority host economies for FDI for the 2010 to 2012 period (the number of times that the country is mentioned as a top priority for FDI by transnational corporations). and 4 indicating an increase of more than 50 percent. The number in parenthesis is the country’s rank in last year’s UNCTAD survey. 1 indicating an increase of less than 10 percent. India among favourite destinations for FDI India Infoline News Service / 09:48 . 2010 The projection made in the report is based on the survey conducted among Trans National Corporations (TNCs) . 3 indicating an increase between 30 percent and 50 percent. The figure below shows prospects for respondent companies’ FDI expenditures in 2010 to 2012 as compared to 2009 by home region (average of responses from the transnational corporations surveyed) with 0 indicating no change.

to ensure that India remains increasingly attractive and investor-friendly. effective 1 October.nic. through a consultative process and significant changes have been made in the policy regime. Rate This Article Thank you for the rating. The Government plays an active role in investment promotion. The circular is available in the public domain and can be accessed at the website of the Department of Industrial Policy & Promotion (http://dipp. is permitted on the automatic route. in most sectors/activities.in). under which FDI. This policy is reviewed. Minister of State for Commerce and Industry. 2010. as Circular 2 of 2010. in recent times. A number of joint commissions and joint working groups have been set up to promote industrial. This information was given by Shri Jyotiraditya M Scindia. The Government has also set up CEOs’ /Business Leaders’ Fora with some countries for active business-to-business cooperation and for developing a road map for partnership and industrial cooperation. issued by Department of Industrial Policy and Promotion. technical and scientific cooperation with select countries. Country-wise FDI projection is not available. intended to stimulate flow of foreign direct investment into India. through dissemination of information on the investment climate and opportunities in India and by advising prospective investors about investment policies and procedures and opportunities. in a written reply in the Rajya Sabha. . 2010. on an ongoing basis.India is projected to become the second most attractive destination for FDI in 2010-12. The projection made in the report is based on the survey conducted among Trans National Corporations (TNCs). up to 100%. It also coordinates with apex industry associations in their activities relating to promotion of industrial cooperation. Government has put in place an investor-friendly policy on FDI. as per UNCTAD’s World Investment Report. The FDI policy is now available in the form of a consolidated document.

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