India bigger source of FDI for European firms than China

Discussion in 'Economics' started by Yuvrajjj, May 22, 2008.

  1. Among the BRIC (Brazil, Russia, India, China) countries, India emerged as the largest source of foreign direct investment for the European Union in 2007, thanks to high value takeover deals like Tata-Corus.

    From a mere 500 million euruos in 2006, India's FDI to EU leapfrogged to 9.5 billion euros in 2007, way ahead of inflows from China (500 million euros), Russia (1.0 billion euros) and Brazil (1.9 billion euros), according to Eurostat data.

    In fact, FDI from China and Russia to the 27-nation EU declined from 2.2 billion euros and 1.5 billion euros.

    Besides India emerging as an important source of FDI for EU firms, it also saw big rise as a destination for European investment, much more than China and Brazil.

    While the EU outflows to India were 10.9 billion euros, they were only 1.8 billion euros to China and 7.1 billion euros to Brazil. However, FDI outflows to Russia were higher at 17.1 billion euros.

    "FDI is the category of international investment that reflects the objective of obtaining a lasting interest by an investor in one economy in an enterprise resident in another economy. The lasting interest implies that a long-term relationship exists between the investor and the enterprise, and that the investor has a significant influence on the way the enterprise is managed," Eurostat said in a statement.

    It said interest is formally deemed to exist when a direct investor owns 10 per cent or more of the voting power on the board of directors.

    Tata Steel acquired Anglo-Dutch Corus in an 11-billion-dollar deal early 2007.