Developing nations must ease FDI rules: World Bank
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New Delhi: Developing economies need to ease restrictions on foreign direct investment (FDI), amplify its economic benefits and strengthen global cooperation to accelerate investment inflows, the World Bank said on Monday.India received $28.1 billion in FDI in 2023, making it among the top recipients among emerging market and developing economies (EMDEs), according to the World Bank.FDI into developing economies dropped to its lowest level since 2005 amid rising trade and investment barriers, according to the World Bank report titled 'Foreign Direct Investment in Retreat, Policies to Turn the Tide'.This decline mirrors trend in advanced economies, as high-income countries saw FDI falling to $336 billion-lowest since 1996.Indermit Gill, the World Bank Group's chief economist and senior vice president, attributed this downturn to public policy decisions.India, along with China and Brazil, accounted for nearly half of total FDI inflows to EMDEs, on average, during 2012-23, according to the report. During this period, India's share of FDI inflows to EMDEs stood at 6%, while China and Brazil accounted for 10% and 6%, respectively. In contrast, low-income countries received only 2% of total inflows."It's not a coincidence that FDI is plumbing new lows at the same time that public debt is reaching record highs. Private investment will have to power growth, and FDI happens to be one of the most productive forms of private investment," Gill said.M Ayhan Kose, World Bank Group's deputy chief economist said: "Reversing this slowdown is not just an economic imperative-it's essential for job creation, sustained growth and achieving broader development goals."
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