India ranked 13th in global list of FDI inflow for 2007-08

Despite India's accomplishment, it was dwarfed by its economic rival. China broke the $100-million benchmark by receiving $108.3 million in inward FDI flows, placing it third in the world behind the US and France. India did not rank in the top 20 in FDI outflows and China remains in the bottom half of the list of 20 which is topped by the US, followed by France, Germany, Japan and the UK.

Torrential economic conditions world-wide sent global FDIs spiralling downward during the second half of FY'08 and the first quarter of FY'09. The report estimates that inflows will fall from $1.7 trillion in 2008 to $1.2 trillion in 2009, with little hope for recovery before 2011. As demoralising as the data may be on the surface, the crisis points to a balancing of world economies with a surge in the developing and transitioning economies' share in global FDI flows increasing to 43 per cent in 2009.

Although comprehensive data shows a massive drop-off from record FDI inflows in 2007, which peaked at around $2 trillion, the performance of Russia, China and Hong Kong — and to a lesser extent India — led to record investments in Africa, Latin America, Asia and the sub-group of least-developed-countries.

Despite the surge, FDI growth in those countries has tapered off according to the report. "While developed economies were initially those most affected, the decline has now spread to developing countries, with inward investment in most countries falling in 2009 too," reads the report. "The decline poses challenges for many developing countries, as FDI has become their largest source of external financing."

India slipped from second to third on the list of most preferred FDI locations. China and India together accounted for half of the region's FDI inflows and one-tenth of the world's total inflows. India did beat China by landing a company — Karuturi Global Limited — on the list of top 50 trans-national agriculture-based corporations in developing countries.