United Nations: Developing and transition economies, for the first time, absorbed more than half of global foreign direct investment (FDI) flows of about $1,122 billion in 2010, reports PTI quoting a UN body report.
While FDI has picked up in countries like Singapore, Hong Kong (China), China, Indonesia, Malaysia and Vietnam, there has been a 14% drop in overseas investment in South Asia due to decline in India’s inflows, the report by the UN Conference on Trade and Development (UNCTAD) said.
Global inflows of FDI rose marginally by 1%, from $1,114 billion in 2009 to almost $1,122 billion in 2010, based on UNCTAD estimates, which also revealed that FDI flows to developing economies rose by some 10% to $525 billion in 2010, due to a relatively fast economic recovery and increasing South-South flows.
“While FDI inflows to developed countries contracted further in 2010, those to developing and transition economies recovered, surpassing the 50% mark of global FDI flows,” said the issue of UNCTAD’s Global Investment Trends Monitor.
“The improvement of economic conditions in 2010 drove up reinvested earnings, while equity capital and intra-company loans remained relatively subdued,” it added, noting that the cross-border mergers and acquisitions volume rebounded.
India, however, registered a 31.5% decline in FDI at $23.7 billion in 2010 from $34.6 billion in 2009.
Cross border mergers and acquisitions (M&As) also dipped by 14.3% to $5.2 billion in 2010 from $6 billion in the previous year.
China registered 6.3% increase in FDI inflows (in the non-financial sector) to $101 billion, but M&As declined by 44.6%.
The report said that FDI flows to South, East and South-East Asia have outperformed other developing regions.
“After a 17% decline in 2009, inflows to the region rose by about 18% in 2010, reaching $275 billion,” the report said, noting that the growth was due to “booming inflows” in Singapore, Hong Kong (China), China, Indonesia, Malaysia and Vietnam.
A strong rebound in FDI flows to developing Asia and Latin America offset a further decline in inflows to developed countries, according to the UN body.
For 2011, UNCTAD estimates FDI flows to be between $1.3 trillion and $1.5 trillion. Worldwide M&A activity (domestic and cross-border M&As combined) is also expected to rise further this year.
“A strong global FDI recovery depends much on the steady economic and FDI recovery of the developed economies,” it said.
Dubai: Plans to set up an income tax office in the UAE are in the pipeline, reports PTI quoting India’s ambassador to the UAE, MK Lokesh.
Mr Lokesh confirmed to PTI that further to a decision taken by the government of India, efforts are being made in this direction and such a centre's scope and functions are being determined.
“It is still at a preliminary stage and might take some time. However, the suggestion did not go from the embassy but was taken in New Delhi,” he said.
Reports in the local media earlier said that New Delhi wants to set up an Income Tax office in Abu Dhabi to keep an eye on investments made by wealthy Indians in the UAE, which is among seven countries chosen for the project.
According to reports, similar offices will operate in the US, the UK, Germany, France, the Netherlands, Japan and Cyprus, while two already exist in Mauritius and Singapore.
The ambassador said that once the proposal materialises, several approvals will have to be taken including those of the local authorities.
Mr Lokesh also said that such proposals are unrelated to recent debates in India regarding the taxation of expatriates.
He pointed out that a taxation agreement between the two countries already exists.
Mumbai: The Bombay High Court on Tuesday set aside a Maharashtra government directive that asked Tata Power to supply 360MW power to Anil Ambani led Reliance Infrastructure (R-Infra), reports PTI.
A division bench of justices Dhananjay Chandrachud and Anoop Mohata held that such a directive was “ultravires” to the provisions of the Electricity Act.
The state government had issued a directive last year to state load dispatch centre to continue to supply power to R-Infra from Tata Power.
Last year, the company said it would stop selling 360MW power to R-Infra following which the Ambani-owned power supply company sought the state’s intervention.
The government issued the directive saying that if Tata discontinues power supply to R-Infra, the suburbs of Mumbai would face acute shortage or be burdened with higher tariffs as it would have to buy electricity from outside the state.
Hence, the government said it was stepping in and asking Tata Power to maintain status quo in the matter of power supply to R-Infra.
Tata Power moved the high court challenging the directive. It argued that in keeping with the provisions of the Electricity Act, the government cannot issue such a directive compelling it to supply power to a particular distributor.
The high court had last year refused to grant interim relief to Tata Power against the directive to supply power to R-Infra. It had said that the dispute could be settled by Maharashtra Electricity Regulatory Commission.