As on January 6, 2025, several noteworthy developments have occurred in the field of Foreign Direct Investment, as different regions and countries adapt to changing global economic landscapes.
Investors Buy a Record Amount of Indian Bonds from Overseas
The year 2024 saw a sea change with a record inflow of foreign investments worth around ₹1.24 trillion (about $14.5 billion) into its government bonds in India, an unprecedented headline. There is also speculated to be contributing to the record inflows is India’s recent inclusion in JPMorgan’s emerging market debt index. However, the 2025 outlook suggests inflows could potentially decline, depending on interest rate trajectories for India and the US and changes in the rupee value.
Saudi Arabia and Nigeria Sign Important FDI Deals
Following a number of international trade deals intended to support Nigeria’s agriculture industry and improve food security, the country is expected to draw more than $5 billion in foreign direct investment from Saudi Arabia in 2025. The Saudi Agricultural and Livestock Investment Company (SALIC) has proposed a $3.5 billion investment to purchase a majority position in OLAM Agri Pte, a Singapore-based agribusiness with significant activities in Nigeria. This is a noteworthy aspect of this partnership. It is projected that these calculated investments will boost economic expansion, generate job opportunities, and improve Nigeria’s standing in international agricultural supply chains.
Vietnam Declares a Record-High 2024 FDI Disbursement
Vietnam’s strong economic growth and appeal as a destination for international investors are reflected in the country’s record-breaking FDI disbursement for 2024. Vietnam has 42,002 legitimate foreign investment projects as of December 31, 2024, with a total registered capital of around $502.8 billion. This accomplishment highlights Vietnam’s deliberate efforts to foster an environment that is conducive to investment, which has greatly aided in the country’s economic growth.
The Central Bank of India Issues a Framework for the Reclassification of FPI to FDI
An operational framework for reclassifying equity investments made by Foreign Portfolio Investors (FPIs) that above the 10% barrier as Foreign Direct Investment (FDI) was introduced by the Reserve Bank of India (RBI) in November 2024. FPIs must limit their investments to less than 10% of the total paid-up equity capital, per the 2019 laws. The new framework offers reclassification standards that guarantee adherence to sectoral FDI laws and required government clearances, especially for investments coming from nations that share India’s land borders. The objective of this program is to preserve regulatory clarity and expedite investment classifications in India’s financial markets.
These developments highlight the evolving landscape of FDI globally, with countries implementing strategic policies to attract and regulate foreign investments, thereby influencing their economic trajectories in 2025 and beyond.