Thursday, April 5, 2012

Anomalies in Foreign Direct Investment (FDI) - How much unbelievable it is?


Do you know who the largest foreign investor in India is? Interestingly, it is neither US nor Japan nor any other European countries but a small island in the Arabian sea - Mauritius. This country invested a whopping 2, 47,092 crores ($55,203mn) in India. More than 5 times that of the next big investor Singapore 58,090 crores ($13,070mn) which is again close to 15 thousand crores more than that of the third biggest foreign investor in India - United States. (#1)

Now let’s check about China. Who can be the biggest investor in China? Well according to the latest report in 'The Economist' it is Hong Kong and the second position goes to 'British Virgin Islands'. (#2).

The question is why this anomaly. The amount of money pumped in to India and China (may be to so many other countries) from these small islands and other tax heavens are unbelievably high. Just imagine Mauritius GDP is around $10bn only.

Read this interesting article on 'The Economist' - Shells and shelves.

Sajeev.

(1) FDI: The top 10 nations investing in India
(2) 'The Economist' - Shells and shelves

Photo Courtesy: Income Tax Department, Ministry of Finance, Government of India. Later edited to suit this article.

7 comments:

  1. Raul Castro declared as early as 2007 that Cuba needs more foreign investment, and the Communist Party’s economic reform blueprint reiterated the point: more foreign investment, from more countries, with projects evaluated more promptly and according to broader criteria.

    But not a great deal has happened, as Reuters reports. One long-time investor, Unilever, is pulling out, and the golf course projects remain in the “any minute now” status where they have been for years.

    The current reforms are being rolled out on a timetable that extends to 2015, so maybe everything is right on schedule. One wonders if the iffy health of Hugo Chavez is causing a re-assessment of the timetable.

    Meanwhile, the Economist reports on the arrest of a British subject some weeks ago, and El Universal reports on foreign capital flowing in to invest in houses and businesses

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