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Indian FDI from the UK fluctuated wildly in 2016, reports Julie Reynolds.  

Indian FDI from the UK had a rollercoaster year in 2016, according to data from cross-border investment monitor fDi Markets. Though the year got off to a good start and project numbers steadily increased in the first quarter, numbers declined by 75% in April with only two projects recorded.

FDI looked to be on the up again after India received 10 projects in May, but this was short-lived and the second quarter ended with five projects recorded in June. Accounting for eight projects in August, Indian FDI from the UK looked on the upturn for the third time in 2016, but from September there was a steady decline until the year-end.

Though project numbers and capital investment increased accordingly in the first quarter of 2016, job creation fell by 49.5%, from 2034 jobs to 1028 in March. There was the same story in August, with both project numbers and capital investment increasing but job creation falling by 63.9% from 3145 jobs to 1134.

Despite only receiving five projects in June 2016, India announced $3.86bn of FDI and 4279 new jobs, largely due to one project in Pune. July also saw a considerable amount of capital investment compared with project numbers, due to a large project in Doom Dooma.

Bangalore and Mumbai were the top cities in which to invest, accounting for six projects each from the UK. London was the top source city, accounting for 46.8% of FDI projects, 87.5% of capital investment and 72.3% of jobs created.

Of the total 62 projects from the UK, 21 were for manufacturing activities. According to UK investor motives recorded by fDi Markets, India offers an opportunity for domestic market growth and favourable policies.

Since 2015, the Indian government has taken steps to make the country more attractive for FDI, such as easing regulations. Most sectors can now get automatic approval rather than requiring a green light from the government.

This article is sourced from fDi Magazine
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