UNCTAD Current Affairs - 2020
The Department for Promotion of Industry and Internal Trade (DPIIT) operating under Ministry of Commerce and Trade has amended the FDI (Foreign Direct Policy) to allow 100% foreign investment for insurance intermediaries. This includes insurance companies, third party administrators, insurance brooking, loss assessors and surveyors.
Initially DPIIT had allowed only 49% of FDI in the insurance sector. This has now been increased to 100% to increase Ease of doing business in the insurance sector. With this move, the foreign companies shall easily buy stakes in Indian Insurance Companies.
The 100% FDI in Insurance Sector was announced by Finance Minister Nirmala Sitaraman in the Budget 2020-21. This is essential because, according to UNCTAD (United Nations Conference on Trade and Development) World Investment Report, 2019, India faced third consecutive annual decline in terms of FDI in 2019.
UNCTAD is a UN Body that deals with trade and investment. It was established in 1964. It also measures the Sustainable Development Goal set out by the member countries of the United Nations.
Tags: DPIIT • FDI • Insurance • Nirmala Sitaraman • Sustainable Development Goals
On January 20, 2020, the United Nation Conference on Trade and Development released its report on Global Investment Trend Monitor Report for the year 2019. The Global FDI of the year 2019 was 1.39 trillion USD. This has declined by 1% as compared to 2018.
According to the report, FDI in South Asia increased by 10% as compared to 2018. The inflows of Pakistan and Bangladesh however declined by 20% and 6% respectively. China remained the topmost FDI recipient in the world as it was in 2018 followed by the United States. The United States in 2019 attracted 251 billion USD FDI and the inflows of China was 140 billion USD.
The report also said that the inflows into developing economies remained unchanged. The FDI in Latin America and Caribbean rose by 16%. The FDI in African countries were 3% and was far less as compared to other parts of the world.
The growth of FDI in South Asia was mainly due to India. In 2019, the India’s FDI was 49 billion USD. The report says that FDI in 2019 has increased by 16% as compared to 2018. The majority of the input in India went into Information Technology.
Predictions of 2020
The report predicts that FDI flows in the country will increase in 2020.