Asia’s Foreign Direct Investments: Understanding the Trend

Foreign Investment channeled into Asia has reached a record high exceeding $600 billion in 2021. In stark contrast to the plummeting rates of global FDI, flows to the developing economies in Asia marked an all-time high in the post-pandemic period. Witnessing a rise for the third consecutive year despite recurring pandemic waves, there are notable underlying trends that are driving such levels of investment. A report shows that Asia received the largest FDI in the world, accounting for nearly 40% of the global inflows.  

Investments remained highly concentrated

China followed by Hong Kong, Singapore, India, the United Arab Emirates, and Indonesia accounted for nearly 80% of the investment in the region. Up from just a 6% increase marked in 2020, China witnessed a more than 20% increase in levels in 2021. With about a 4% increase in investment levels from 2020, Hong Kong has accounted for more than $140 billion in investment. Even though the United Arab Emirates remained the largest recipient in the West Asia region, Saudi Arabia and Turkey witnessed massive rises in inflows of investment. Singapore has been at the forefront of the highest inflows in the Southeast Asian region accounting for nearly one-third, amounting to nearly $100 billion. India witnessed a historically high annual FDI inflow of $80 billion in FY 2021-22.

Prominence of sectors

Providing attractive opportunities for improving ESG standards, Asia represents investors with a lucrative opportunity. Hence, investment in sectors synonymous with sustainable development goals has been one of the major trends witnessed. These sectors have accounted for a more than 2-fold increase between 2020 to 2021. The manufacturing sector in India marked a massive inflow of FDI in FY2021-22 accounting for a nearly 80%  rise compared to FY2020-21. Compared to FY2020, UAE witnessed FDI inflows increase by 13% in the manufacturing sector and a 9% increase in the healthcare sector. Japan recorded maximum FDI inflows in the finance sector along with transportation and electric machinery production, communication sector, and pharmaceuticals. With advanced technology, R&D and a highly skilled workforce have been at the core of garnering maximum investment in Japan.

Digital adaptability, technology resilience, and favorable demographics are the primary driving force behind such inflows of FDI in the region. With rising income levels and evolving behavior fuelled by technological innovations, the consumer sectors in Asia represent a potential pool of investment opportunities. With long-term growth and diversification opportunities, Asia is set to outperform its western counterparts by becoming the most dynamic economic region.

For more interesting and detailed insights, market intelligence and analysis, get in touch with our experts consultants here.

Source : World Investment Report 2022, Milken Institute, Fidelity, UNCTAD



Related Blogs

Customer Intelligence
February 6, 2023

The Future of Customer Experience: Harnessing the Power of Customer Intelligence

Customer behavior and tastes are currently driving industry changes.

Industry Analysis
January 31, 2023

Sustainable Digitization: The Secret to SME Success in the Digital Age

SMEs find it extremely difficult to remain competitive in the fast-paced digital environment of today.

Industry Analysis
January 30, 2023

The State of Cybersecurity in India

Ranking 4th among APAC countries and Top 10 In Global Cybersecurity Index 2020 Rankings, India has been immensely vocal about its cybersecurity ambitions.

Market Analysis
January 17, 2023

Energy Market Dynamics: How Renewable Energy is Changing the Game

One of the fastest growing and most complicated markets, energy markets are of major significance in the global economy.

Technology
January 12, 2023

Adaptive AI for business: Unlocking new opportunities and driving growth

Adaptive AI is a type of AI that can change its behavior and decision-making processes based on new information and changing circumstances.

Macroeconomics
January 6, 2023

India’s growth Trajectory in 2023: Can it dodge the looming global downturn?

2022 marked the highest inflation rate in some of the most advanced economies in the world.

Macroeconomics
December 26, 2022

Market Highlights : Looking back at the major disruptions in 2022

This year has been described as a year of change. There has been a wave of disruption and turbulence that has earmarked certain trends that are going to influence the sectors in the days to come.

Market Intelligence
December 22, 2022

Market Intelligence: Harness the power to drive Business Growth and Success

Companies that use market intelligence are twice as likely to outperform their competitors. Research shows that market leaders view analytics as a major differentiator.

Business Transformation
December 19, 2022

Business intelligence in action: How insight can drive decision-making in different industries

Business Intelligence (BI) augments an organization’s capability in decision-making and drives business growth.

Business Transformation
December 16, 2022

Maximize Your Business Potential: How Business Intelligence Can Transform Your Business

Business intelligence (BI) refers to the collection, analysis, and interpretation of data about a company's operations, markets, and competitors.

Industry Analysis
December 14, 2022

Visualizing Banking's New Frontier: How the Industry is Transforming to Meet the Needs of the Future

The banking industry is undergoing a period of rapid change, driven by advancements in technology and changing customer expectations.

Macroeconomics
December 5, 2022

India Assumes G20 Presidency: Startups at the Forefront of Key Agenda

India assumed its first-ever G20 Presidency on 1st December 2022 and will be hosting 200 events in 32 different sectors across 50 cities until the next G20 Summit to be held in New Delhi in September 2023.

Technology
November 29, 2022

Edge Computing for Business: Cloud’s Next Evolution

Technology remains to be the biggest trend for driving business transformation

Market Analysis
November 25, 2022

The Sustainability Market: A paradigm shift

In line with the United Nations’ Sustainable Development Goals 2030 and COP 27, as the countries pace up to meet the deadlines, similar trends are readily observed in the startup ecosystem.

Industry Analysis
November 24, 2022

Mobile Commerce: Becoming the Ever-Growing Part of the E-commerce Equation

Mobile Commerce or M-commerce is emerging as one of the most contending subsets of the E-commerce market.

Sustainability
November 22, 2022

Developments at COP 27

The world is presently seeing the largest reallocation of capital in its history.

Marketing
November 17, 2022

Sensory Marketing: Decoding a Robust Branding Strategy

Sensory marketing, a subset of psychological marketing is all about appealing to one or more of your customer's five senses to uniquely position your brand or product, thus successfully driving their behavior, judgment, or perceptions

Industry Analysis
November 16, 2022

5G: Setting the Stage for the Next Generation of Digital Transformation

Valued at more than $5 billion in 2020, the global 5G technology market is growing at a CAGR of nearly 66% and is forecasted to reach a whopping $800 billion by 2030

Industry Analysis
November 9, 2022

Generative AI: How Technology Disruptor Is Redefining Capabilities

The buzz behind Artificial Intelligence isn’t something new, but recently a category of AI- Generative AI has been making headlines.

Industry Analysis
November 5, 2022

Gearing up for COP27

United Nations Climate Change Conference more commonly referred to as the Conference of the Parties of the UNFCCC

Market Analysis
October 26, 2022

Net-Zero Emission Innovation : The Transition Checklist

Companies are readily seeking to envision a strategic

Consumer Insights
October 25, 2022

Understanding the Dynamically Changing Nature of Consumers

The Covid-19 pandemic has been instrumental to change

Market Insights
October 18, 2022

The Circular Economy - How is Asia Transitioning

In this era of stupendous globalization,

Market Insights
October 18, 2022

Digitalization in Asia - The Competitive Advantage

Using digital technology is no longer meant for just driving solutions

Industry Analysis
September 15, 2022

How Blockchain is Transforming the Banking & Finance Sector

The buzz around the term ‘blockchain’ gained gargantuan momentum in recent years.

Industry Analysis
September 15, 2022

Fintechs : The New Age Disruptors Challenging Traditional Banking

Fintech is an umbrella term for describing all sorts of

Industry Analysis
September 15, 2022

The Future of Banking : How are Banks Reinventing Themselves

The history of banking dates back to around 2000 BCE

Macroeconomics
August 23, 2022

Turbulence Ahead : A Year of Hiking Interest Rates

The global economy is currently at an unprecedented level

Macroeconomics
August 22, 2022

The APAC Story : Changing centre of gravity of the global economy.

Including more than 20 countries, home to nearly 60%

Industry Analysis
August 17, 2022

The $10 Trillion Sustainability Centric Market How ready are you to capture the opportunity?

In recent years, there has been a trend in the emergence

Macroeconomics
August 16, 2022

Internationalisation of Indian Rupee - What does it hold?

In the wake of global market fluctuations and geo-political tensions

Macroeconomics
August 10, 2022

Inflation on the rise: What does it mean for economic growth?

Two years ago, countries worldwide were concerned to overcome the pandemic

Industry Analysis
August 3, 2022

Business in the Metaverse

Metaverse- a term that first came up in Neal Stephenson’s 1992 science fiction novel - Snow Crash - which described life-like avatars meeting in realistic 3-D buildings and other virtual reality environments - is currently the favourite term of marketers.

Industry Analysis
July 13, 2022

The Protein Challenge: New entrant in the market- Alternate Protein & its Indian Context

Following the Covid-19 crisis, the alternative protein industry has seen a significant boost. The alternative protein market is anticipated to grow at a CAGR of 11.2% from 2020 to 2027 to reach $27.05 billion by 2027.

Competitiveness
June 1, 2022

Reaching to the Moon: How is UAE transforming itself as a future nation?

Historically being counted in the oil-country category, the United Arab Emirates (UAE) has been dramatically making its transition into being energy-focused yet finely attuned to technology.

Follow us

connect with us through facbook
connect with us on instagram
connect with us on linkdin
connect with us on twitter