India received USD 64 billion in Foreign Direct Investment in 2020, the fifth-largest recipient of inflows in the world, according to a UN report which said the COVID-19 second wave in the country weighs heavily on the country’s overall economic activities but its strong fundamentals provide optimism for the medium term.

The World Investment Report 2021 by the UN Conference on Trade and Development (UNCTAD), released Monday, said global FDI flows have been severely hit by the pandemic and they plunged by 35 percent in 2020 to USD 1 trillion from USD 1.5 trillion the previous year.

The country’s export-related manufacturing, a priority investment sector, will take longer to recover, but government facilitation can help. India’s Production Linkage Incentive scheme, designed to attract the manufacturing and export-oriented investments in priority industries including automotive and electronics can drive a rebound of investment in manufacturing.

The report states, “FDI in South Asia rose by 20 percent to USD 71 billion, driven mainly by strong M&As in India. Amid India’s struggle to contain the COVID-19 outbreak, robust investment through acquisitions in ICT (software and hardware) and construction bolstered FDI, it said adding that cross-border M&As surged 83 percent to USD 27 billion, with major deals involving ICT, health, infrastructure, and energy.”

“Large transactions included the acquisition of Jio Platforms by Jaadhu, a subsidiary of Facebook for USD 5.7 billion, the acquisition of Tower Infrastructure Trust by Canada’s Brookfield Infrastructure and GIC (Singapore) for USD 3.7 billion, and the sale of the electrical and automation division of Larsen & Toubro India for USD 2.1 billion. Another megadeal Unilever India’s merger with GlaxoSmithKline Consumer Healthcare India, a subsidiary of GSK United Kingdom) for USD 4.6 billion also contributed,” it adds.