India ranks 14 on FDI inflow index in 2010

The US tops the list of countries with overseas fund inflows at $228 billion, followed by the Chinese mainland, which attracted inflows of $106 billion, and Hong Kong at $69 billion. Belgium was the fourth largest FDI inflow destination at $62 billion. 

According to the UNCTAD's annual investment survey -- World Investment Report 2011 -- the FDI to South Asia declined to $32 billion, reflecting a 31 percent slide in inflows to India and a 14 percent drop in flows to Pakistan.

India ranked fourth on the list of top 10 recipients and sources of FDI inflows in developing Asia in 2009 and 2010 behind China and Singapore.

In contrast, inflows to Bangladesh, a rising low-cost product location, increased by nearly 30 percent to $913 million.

"The desire to invest in India is still there but we need to put in a system to ensure that the deal that is given will stand for sometime," said Biswajit Dhar, director general, Research and Information System for Developing Countries.

"We are rolling out a number of policies, we are also reviewing some of our FDI policy. For the moment investors will just wait and watch," Dhar, who was speaking on investor sentiments, added.

India was also the fifth largest source of funds (FDI outflow) in developing Asia, helped by a string of major acquisitions in countries across the globe between 2007-2011.

Among major buyouts that figured in the UN report was Tata Steel's acquisition of UK-based Corus group worth $11.8 billion and Hindalco Industries's acquisition of US firm Novelis Inc worth $5.8 billion.

Tata Motors also acquired UK-based Jaguar Cars for $2.3 billion, Essar Steel Holdings bought Canada's Algoma Steel Inc for $1.6 billion and United Spirits acquired Whyte & Mackay of UK for $1.17 billion.

The report also said that global FDI investment inflows rose 5 percent to $1.24 trillion in 2010. However, it added that FDI flows at the end of the year were over 15 percent below their pre-crisis average and nearly 37 percent below their peak in 2007.